Q/A Capgemini's Steve Rudderham: The Nearshore Splashes into a New Era

I met Steve Rudderham in Guatemala City a few months ago at the IAOP chapter meeting and was immediately struck by his vision for driving higher performing outsourcing relationships and how Nearshore providers have a huge opportunity to capture a bigger share of the global exported services marketplace. We recently checked in with Steve who just recently joined Capgemini as vice president of  client engagement for the Americas. In the interview we talk about critical issues facing the sector including Life Beyond Call Centers, Governments’ Role in Driving BPO activities, the Key Advantages of the Nearshore Customer Relationship, Safety and Risk issues, Building an Active Community of Nearshore Professionals and Capgemini’s Leadership Role in the Region.

Question: Steve, at the recent IAOP Central America meeting in Guatemala you called on Central America outsourcing service providers to think more about higher value services and that “there is more to life than call centers.” What risk do these providers face and where should they be headed?

I wanted to encourage local providers to look beyond the capabilities of Call Centers – that is what India, Europe and now China have done well. It becomes an iterative process where people see career growth in a company beyond answering the telephone, and stay with that provider, and in turn that allows the providers to demonstrate a stable workforce which then allows them to market more services, and hence more career growth for individuals and the community. Without these value added services, the outsourcing economy for a particular will quickly flatten out in terms of growth and development.

Capgemini Latin America vitals:
Total employees in Latin America  – Approximately 1,000
Locations: Guatemala, Santiago, Buenos Aires, Sao Paulo (San Salvador and Xela)
Services: F&A – O2C, R2R, P2P, Customer Care & Intelligence
Languages: Spanish, English and Portuguese

Question: In looking beyond call centers, what higher-value services can Nearshore services providers move toward and what human capital capabilities will they require?
There has been an increase in demand within the F&A Services sector for Nearshore alternatives – particularly in Accounts Payable and Accounts receivable processes. Once the clients are comfortable with these processes staying Nearshore, it opens up the opportunity for more complex work like General Accounting, General Ledger and FP&A work, so long as the country can support this demand with the resources. Supply Chain and procurement is another growing vertical that Latin America countries should look to take advantage.
Question: Tell us about your new role at Capgemini.
I have recently moved from Business Leader of Genpact’s Latin America operations to Capgemini as a Vice President for Client Engagement in the Americas. In this role, I will be leading the engagement for several key clients in the Americas and ensuring that service delivery is exceeding customer expectations.  I am looking forward to the challenge and excited about working within Capgemini as they expand their Americas footprint.

Question: What has the economic crisis done to impact the way Capgemini supports US clients seeking support in Nearshore markets?

Within the outsourcing industry, we continue to observe a lot of activity, both in new proposals and also existing clients growing their offshore footprint. In the current economical climate, we are committed to helping clients improve their efficiencies and reduce their overall costs as they experience pressures in their respective market places. This is not achieved by only focusing on offshoring roles, but by working with the client in their processes and understand where we can work together on productivity projects to reduce costs.

Question: The well-known benefits of Nearshore outsourcing  include time zone alignment, physical proximity and cultural familiarity. Are there other technology/ infrastructure features, governmental roles or human capital issues that are less understood but still an important part of the value proposition of working in these markets?
Providers are always looking to leverage the Global Talent Pool and I think that this progression up the value chain of services offered by Nearshore countries are now adding to the benefits you outline.  Government agencies are becoming more pro-active in attracting providers as well with incentives to come to their countries. If I look at the recent IAOP regional meeting in Guatemala, we saw representation from Nicaragua, Honduras, Guatemala, Costa Rica and Columbia as they look to learn how the BPO market is evolving in their region.
Question: From a global perspective, many large, multi-national BPO providers are forecasting significant growth in their Latin American operations. What is the outlook for Capgemini in these markets? Will there be more centers opening or perhaps acquisitions?
Capgemini currently services clients from Chile, Brazil, Argentina and Guatemala and that allows us to cover English, Spanish and Portuguese language requirements. As a business, we will continue to assess where the right place is to be, against the clients’ needs in terms of language and product services. With the emergence of talent in new countries, it is important that we keep abreast of these developments. We have seen considerable growth in our current centers in the last 12 months and will be transitioning further processes in the coming months.

Question: Because of your close proximity, do you end up seeing your clients more on a face-to-face basis? How important are these encounters both for the client as well as your teams?
Where we have facilities within a 3 hour flight from the USA, like Guatemala, then clients are more visible through the year. They are able to fly in, work for 1-2 days and fly back to their offices and still be able to go back into their own facilities. The close time zone is another important factor as client visits to offshore destinations like India, usually take up at least a week, and a lot more expense.  Our operations are basically an extension of our clients operations, so it is important that they are visible as much as possible.  It is a great motivator to the teams to see their clients on site and we try to encourage this as much as possible.
Question: One of the realities of working in the Nearshore is there is an image that some countries are not exactly the safest places to do business. When clients address this issue, what is your response?
There are different situations of social, geographical, and political environments around the world – I do not believe that this is just a Nearshore issue. Clients are concerned about the continuity of operations and the safety of the employees supporting their operations. Within the Nearshore arena, we ensure that the client has up to date information from independent resources like OSAC and the local government embassies. Within the facilities, the safety of our employees is our highest priority and we continually work and review to ensure that we keep a safe working environment for them. When choosing new countries to establish a present, there is a very detailed due diligence that is undertaken that involves all of the factors that a customer would be concerned about, and the location choices are made for those areas that provide the least risk for our clients.
Question: The IAOP has been instrumental in building a sense of community among Nearshore providers and clients, and you have been a central contributor to this development. What more would you like to see in terms of cross-region collaboration and community building?
I would definitely like to see the inputs and commitment from the government agencies a lot more. We generally get to interact with the various ministries but it is for a short period of time and I believe that they would get a lot more value for their countries if they participated in more detail and understood the true challenges that prevent growth within the outsourcing industry. They are competing with very mature markets like India and Europe and need to understand the challenges that they have overcome. Also, further best practice sharing is important in other emerging markets like the Philippines and also South America as well as Central America.

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