Nearshore Americas’ Founder and Editorial Director Kirk Laughlin was recently invited to visit the Guadalajara delivery center for TCS (Tata Consultancy Services) where he met with key leaders to get an inside view on how one of the world’s largest global sourcing players views Mexico as a part of its global delivery vision.
Hear what Kirk learns on the ground in Guadalajara.
By Kirk Laughlin
Of the 140,000 TCS employees worldwide, nearly 1,000 of them work here in Guadalajara, Mexico. No doubt that number will climb in the coming years as TCS continues its aggressive expansion in the region to power its Global Network Delivery Model (GNDM) and also play a part in expanding the estimated $3 billion annual professional export services industry of Mexico.
The image many people might have about the TCS operations is that it is filled with Indian nations who have been flown over to build roots in Mexico and help broaden the reach of TCS. That image – however – is completely wrong.
Although the arrival of TCS on Latin America shores is considered swift in many ways (over 7,000 employees hired and placed during the last eight years), careful steps have been taken to acclimate each center to its functions and delivery expectations. Ankur Prakash, Country Director at TCS Mexico, says the center started out slowly with small projects for the domestic market before opening up to global customers in 2007. This slow ramp up also enabled the local hiring managers to assess talent. “Initially we wanted to get a strong feeling for the market,” says Prakash, who has been at the Guadalajara facility since it opened in 2003.
The primary Guadalajara center is located in the northern section of the city, population 1.6 million, in a vibrant area mixed with small retail businesses, a major shopping center, a five star hotel and single and multi-family residences. There is clearly a bustling and modernized feel to Guadalajara, and in many ways the city seems just as well laid-out and accessible as any major metro area in the United States. “The first reaction from most of our visitors is ‘I never thought it was going to be like this. This is just great,” one of the local TCS managers said.
Focused on Talent
Talent is critical to any sourcing organization. For TCS, a lot of time has gone into finding people that are able to be “groomed” for integration and achievement at TCS. “We have spoken to thousands of people and the thing that has come to our attention is that salary is not the only driving factor [in deciding to pursue a position],” says one of the TCS managers, emphasizing that it is the opportunity to learn something new as the critical ingredient. Secondly, people are attracted to the deep domain-level training and certifications that have become one of the hallmarks of TCS. Many people in the Guadalajara sourcing circles believe that TCS training is very much a positive influence on the local talent pool as ex-TCS employees circulate into the local economy and bring with them a practical foundation in both tech and service delivery processes. Prakash explains that TCS simply looks for two things – that people come with hunger and are motivated to “stay hungry.”
Even Gabriel Rozman, head of Global Delivery for TCS (and formerly President of TCS Latin America) pointed out in an interview with Nearshore Americas last year that compatibility between those hired in Mexico and the Indian-born management team is not a certainty. “The Indians are willing to make sacrifices that the Latins are not willing to go do,” said Rozman, in our interview. During our interviews in Guadalajara, one staff member, a mid-level manager, argued that the perception of Mexican workers in general needs to evolve in the eyes of most Americas. “One of the biggest challenges we have to overcome the belief that all we are about in Mexico is the fiesta and mariachi. We have to change that image.”
Competitive global services provides in the Guadalajara market argue that TCS has higher churn that rivals in the area, but Prakash says attrition is actually lower in Guadalajara than most other TCS delivery centers. Globally, TCS reported an attrition rate of 11.8% during the most recent quarter. One thing the Guadalajara management team resists is participation in “clusters”, which are in effect are loose federations of local global sourcing organizations which meet regular to focus on coordinating growth in the local market so poaching doesn’t get out of hand and the labor pool doesn’t suddenly run dry.
Among the service delivered out of Guadalajara: Application development and testing, consulting, infrastructure services and BPO. “The exposure you have to new technologies is different” says one of the local employees who spoke to us during the visit. “Smaller companies [in Guadalajara] might hire you project by project over a period of say eight months and then it’s done.”
As is the case in other TCS facilities worldwide, the focus on continuous improvement is paramount in service delivery. Equipped with six sigma training and a strong grounding on process discipline, the natural question is whether TCS employees – especially those who are Mexican – are able to turn around and also leverage their soft skills as communicators to drive greater innovation for clients. Another local manager said local teams strive to identify where they can add more value to projects, and when appropriate “push back” on client requirements to get better overall results.
One of the top attractions of establishing locations into Mexico is the fact that Mexico nationals are able to obtain a professional non-immigrant TN Visa, which permits TCS’s Mexican employees to transit to the US without the complications of other visa schemes. Thanks to the North American Free Trade Agreement, the TN Visa gives Mexico an important lever to use in differentiating itself from other Nearshore neighbors. Unlike the H1 visa which reaches a cap sometime during the year which restricts further visits during that year or the L1 which requires sometimes complex justification of domain expertise, the TN visa enables the free flow of employees to and from the US.
The image many people might have about the TCS operations is that it is filled with Indian nations who have been flown over to build roots in Mexico and help broaden the reach of TCS. That image – however – is completely wrong. “This is not just another facility filled with Indians,” said a local manager. “If clients want work out of India, just hire some Indians there.”
In other words, TCS is very devoted to nurturing the local workforce. Prakash says that TCS may very well expand its operations in other cities in Mexico – which is a clear indication that things are working in this southernmost country in North America. In addition, there remains the possibility that TCS will expand through acquisition – but management has made clear that the company will grow strategically and avoid the path of “purchasing customers or geographies.”