As Softtek, one of Latin America’s most recognized IT services brands, approaches in 40th birthday next year, the company continues on a gradual path of expansion highlighted by growing its operations in Costa Rica, and cementing its presence in Peru.
This news alone is hardly significant. Costa Rica, after all, is a thriving Nearshore market, boasting plentiful talent and price points to match. Companies do and will continue to flock there. But as Softtek Chief Marketing Officer Alejandro Camino explained to Nearshore Americas, the company’s Costa Rica expansion is one part of a larger move that takes one of Latin America’s largest private IT service providers into exciting new directions.
Move to Verticalization
Softtek’s recent announcement will see the headcount at its San Jose development center double with the addition of 60 staff. The center’s focus, embedded software development for tech companies, chip developers and auto part manufactures, means that the bulk of the new staff will be .net developers and automation engineers. The small, specialized team in San Jose has focused on embedded software for its 12 years in existence, and that isn’t changing soon.
What is, however, is the center’s place within the company’s structure. Last year, after several years of meetings, plannings and mitigation strategizing, Softtek adapted its business model from geographical categorization, where countries focused on their national markets and exports, to verticalization. The development center’s role is changing.
“We restructured the company in 2020 – a particularly interesting year to perform a global corporate reorganization,” Camino told Nearshore Americas. “We now have 10 different verticals that focus on our clients’ industries. During the 10 years prior, Softtek had been operating with a regional focus which was split between North America, Mexico and Central America, Hispanic South America, Brazil and Europe.”
Softtek is barely recognizable from the company founded in 1989. As the originator of the Nearshore term, Softtek is a widely revered industry pro and one that has often been at the forefront of business transformation technologies and services exportation. But maintaining this prominence demands evolution. In pivoting to a verticalized structure, Softtek aims to leverage its comparative advantage as a provider of specialized services and carve out an additional distinction that refines its competitive edge.
“The restructure’s initial intention is to be closer to the needs of our customers, and secondly to use our global capabilities to serve our customers regardless of where they’re located. Vertical capabilities should gather skillsets and knowledge to deliver to the client wherever they are,” explained Camino.
Additional Regional Footprints
In changing its structure, Softtek runs the risk of taking its eye off client needs in geographies where it doesn’t have a presence. To counter this, the company is expanding in Colombia and Peru too. The move, said Camino, will “help improve our market presence nationally as well as help our ability to deliver Nearshore services to the U.S. in particular.”
“Colombia has the demographics, availability, incentives and infrastructure we need” — Alejandro Camino
In Colombia, the company will open a new delivery center in Bogota. Around 500 staff should be in place there by the end of the year to service the domestic market and grow the regional Nearshore capabilities. “Colombia has the demographics, availability, incentives and infrastructure we need,” Camino said.
Peru is a different scenario. Softtek has been doing business in Peru for years, but until recently each project was ran through the company’s base in Argentina; there was no dedicated office in the Andean nation. But with the 2019 acquisition of Spanish tech group Vector ITC, a foothold in Peru was finally obtained. Softtek was able to capitalize on this opportunity and has recently won a significant contract with a major Peruvian bank. The Peru move also enabled the company to expand its service portfolio.
“We want to export digital sales and marketing acceleration from Peru, which came as part of the Vector acquisition. It helps making digital marketing spending much more efficient and helps identify and fine-tune campaigns, bringing more leads to their door,” said the CMO.
The Peru location fit well into the company’s wider verticalization capabilities in the financial and government sector, Camino said. Today, the company has some 260 people working in Peru, including tech talent and digital advertisers, who will first be directing their Spanish-speaking abilities for the region before moving on to the Spanish-speaking U.S. market and beyond. “Eventually we’ll have English-speaking capabilities too,” Camino said.
Verticalization is only one pillar of the wider project. Allied to this is the company’s intention to grow its intellection property, accelerators and platforms, epitomized by the FRIDA (Framework for Intelligent Digital Automation) and DIEGO (Digital Enablers for Growth) initiatives that are intended to help organizations adopt smart tools and accelerate time-to-market. The company’s intellectual property portfolio should enable it to justify higher rates should they be charged. “We do not compete on a price basis but on productivity, quality and effectiveness,” Camino said.
Meanwhile, the emphasis on Agile workflows, an area Camino believes the Nearshore is can grow in. “We are seeing a huge shift to digital and to Agile practices. This is followed by a parallel trend, product centric software development.”
“We are seeing a huge shift to digital and to Agile practices. This is followed by a parallel trend, product centric software development” — Alejandro Camino
As the lines between the ideation, build and run of a product blur, Agile capacities are being adopted by companies outside of tech at a far higher pace. Covid-19’s impact on digital transformation has been enormous and every company is climbing aboard. One major fast food restaurant client is training all of its staff, from the very top to the very bottom, on Agile processes, said Camino. This is another area where Softtek can profit.
“Every year we are productizing our service a little more. This will increase our ability to deliver service in a product or platform that clients can then buy as a subscription or receive as part of a business transaction with Softtek. It’s all about being closer to the customer,” said Camino.