Nearshore Americas’ eighth annual Nexus conference attracted a full house to the NASDAQ Entrepreneurial Center in San Francisco this week, shedding light on the importance of adaptability in the age of digital transformation and intelligent automation.
“What underlies everything in the industry is the ability to adapt,” said Kirk Laughlin, Managing Director of Nearshore Americas, during his opening address. “If service providers fail to grasp what their clients need, that’s a problem, so Nearshore is finding ways to adapt, building talent, developing with new technologies, and anticipating whether politics will enable or interfere with their otherwise well-developed business models.”
The theme of adaptation resonated throughout the day, with all speakers offering advice to services vendors and clients on how to keep up with the continuous evolution of emerging technologies and customer demands.
The New Rules for Early-Stage Investing
Opening things up, Jim Marshall, Head of Silicon Valley Bank’s Emerging Manager Practice explained how he sees the region adapting from a venture capital perspective, linking his findings to the services sector.
In Latin America, especially, there are many family businesses that, Marshall says, are reaching into the investment market as economies begin to level out. “We talk to many families who want to be educated on the innovation ecosystem,” he said.
His view is that important emerging technologies are impacting both the BPO and IT services sectors in the Nearshore industry.
“I think Nearshoring will continue to be part of things, but everything is being disrupted, with continual change, so providers and investors need to be aware of the emerging tech that will cause this,” he said. “AI is becoming pervasive, touching many parts of our lives. Machine learning is also booming, so venture firms are investing more in AI companies, mirroring the slope we saw with Big Data a few years ago.”
During the Q&A session after the presentation, audience members wanted to know how venture capital is affecting the services industry.
“Honestly, the sector has been a challenge for the venture space, but once services companies have a little scale, then we have seen deals coming in at the small- to mid-market level,” he said. “Those companies with unique process innovation gain a premium on their valuation, and the industry’s good unit economics always create capital at some point.”
Robotics Process Automation: Lessons in Implementation
Robotic Process Automation (RPA) has quickly become the next great tool for businesses to improve productivity, quality, and customer and associate satisfaction. However, many organizations have not had the success they anticipated, and are not adapting at the level that is required.
“RPA is stable, secure and proven many times over to not impact heavy IT solutions,” said A.J. Hanna from Symphony Ventures. “It really sets the foundations for cognitive, machine learning, and AI later on. Also creates alignments in functional areas that may not have happened otherwise. However, there are companies that approach RPA with a single-minded focus on one thing it can do in the environment, such as shrinking the headcount. The robot will only do what you tell it to do, so it’s vital to get it right the first time. Companies should be very consistent about the goals for the automation program, and be aware that the software requires oversight and maintenance — they have to be taught and understand the environment they will be working in. They are not magic plug-and-play solutions.”
Hanna’s colleague Jaume Sues backed up the concept, reinforcing that RPA adoption is not a one size fits all solution.
“RPA does not touch the systems; it’s a robot that mimics what people do with current systems,” he said. “However, if you can explain exactly what the person is doing with the process and detail what needs to be automated, then implementation timing can be measured in just days or weeks. Once you know how to do things better, then the automation itself is very simple.”
Ultimately, their message was that companies cannot maximize what they are not clear on, but also that the main struggle is that many firms are jumping in without considering the impacts – a lamentation echoed by most RPA vendors. In this case, the process of adaptation is on ongoing one.
The State of Nearshore Delivery as Digital Commands Higher Performance
The final morning session brought together a number of IT services vendors to discuss what is driving their adaptation to emerging technologies and new client demands, and how finding talent is still their main goal.
Santiago Priario, Uruguay Delivery Center Head, Tata Consultancy Services, explained how the process of learning is never ending. “Our CEO says that we need to embrace life-long learning, and waves of change are coming,” he said. “AI is yet to be leveraged in the most efficient was, so by embracing lifelong learning and cascading that into the DNA of our employees we can help with the goal of developing more talent.”
Continuing on the topic of talent, Wendy Johansson, Co-founder and VP of Academy and UX, at Wizeline, descried the company’s approach to tackling the shortage.
“The folks that we find don’t have the skills for next gen tech, so we are certifying them ourselves with Wizeline Academy,” she said. “This ability to change the nature of the community is creating a better set of talent that we can hire now or eventually hire, making a larger pool for us to pull from. Even so, IOS in particular is incredibly hard to hire in Latin America, as the cost of working with it is high for developers. We have brought people from Europe to Latin America who may not have won the US lottery, and people are staying in Guadalajara because the cost of living is amazing.”
The topic of attracting talent from other markets into the Nearshore really jumpstarted the conversation in the panel.
“As the trust in LatAm becomes stronger, clients have become more comfortable with having entire teams in the region, said Monica Hernandez, Founder and CEO at MAS Global Consulting.
Travis Prowell, Chief Technology Officer, Connexeo, which has a team in Cancun, Mexico said that “Location is key, and the ability to visit and build relationships helps. We have people requesting to live in Cancun, but haven’t seen specific people choosing Mexico over the US.”
For IT giant TCS, the trend is more noticeable. “It happens all the time, as our major workforce is in India,” said Ashok Kumar, Queretaro Delivery Center Head at Tata Consultancy Services. “There is a huge time zone difference for customers on the Pacific Coast, so having the best people in the Asia time zone working for clients here is difficult. Ten to fifteen years ago, that was the norm for Asia, but as emerging markets grow that is becoming less and less feasible, so most of our customers have faith in that kind of situation. From day one you can see a huge jump in customer satisfaction when moving to this region.”
Overall, this underlying theme of adaptability resonated throughout Nexus 2018, proving that Nearshore industry stakeholders are fully aware of the need to shift their approach to evolving market demands.
While, in many cases, the region’s services offering is becoming more attractive to buyers, there is still a need for Nearshore vendors to prove that they can keep up with the fast-moving growth of emerging technologies.
Check out our Illuminate Award Winners, celebrating the best of Nearshore at Nexus 2018.