Nearshore Americas

Peru Scores a Rush of Deals from Brazil Software Firms

Drawn by the benefits of trilingual call-center staff and the potential gains to be made from introducing electronic invoicing, Brazilian businesses are beginning to see Peru as a ripe environment for investment.

This was evident at the Peru Service Summit 2013, which took place in Lima from June 17-21. Organized by Peru’s Export and Tourism Promotion Board (Promperu), the summit included a business conference focused on seven sectors, including software, BPO, animation and videogames, which drew 110 contractors and investors from 19 countries in the Americas, Europe and Asia.

Driven By Software

Of those in attendance, 55 percent came from Brazil, Chile, Colombia and Mexico to investigate opportunities in BPO services and software development related to the fields of health, finance, security, the environment and mining – a major industry in Peru.

After 1,600 meetings in just a day and a half, deals worth $8 million USD were closed at the conference, while prospective deals were also agreed worth another $41 million USD in the next 12 months. Of these deals, 40% were in the software sector, 24.3% in the gastronomy franchise sector, 15.2% in BPO and call centers, 12.3% in the editorial sector and 0.4 percent in videogames and animation.

Brazilian firms closed 14.2% of the deals, mostly in software, with only businesses from Colombia (17.3%; primarily in software and call centers) and the United Arab Emirates (15.9%; principally in investment in food franchises) responsible for more deals.

The Brazilian companies interested in software included Neogrid and SIS, while other Brazilian firms at the conference were focused more on the mining and finance sectors, according to David Edery, the head of export services at Promperu.

The Brazilian firms were keen to find service providers and programmers, while linguistic skills were also in demand, Edery told Nearshore Americas. For instance, the Brazilian subsidiary of India-based consultancy firm and IT provider Mahindra was primarily interested in Lima-based call centers manned by trilingual staff capable of speaking English, Spanish and Portuguese.

During matchmaking sessions, it seemed like every third or fourth ‘tent card’ exhibited a Brazil software or IT firm. Given ongoing competition for technology talent in Brazil’s major cities, especially Sao Paulo, it is no surprise that Brazil is looking to establish secondary centers of high-skill labor to augment capabilities in the domestic Brazil market. Peru – given its proximity, population and overall business-friendly climate – seems like a natural choice.  Although some will argue that repatriation of profits from offshore centers is one of the biggest hurdles for globally-minded firms, the fact is that Brazil firms are firmly seeking international relations using a variety of contractual structures.

Case Study: Neogrid’s Peruvian Operations

One of the most prominent Brazilian firms to have targeted the Peruvian market over the last two years is Neogrid, a transnational which provides services and solutions to improve supply-chain management for over 300,000 businesses in 34 countries across five continents.

It was at the 2011 Peru Service Summit that Neogrid signed its first deal with Core do Peru, a partner of Lolimsa, a Peruvian company with a presence in 10 countries which specializes in the production of software and technology for the health sector.

“NeoGrid is currently working on major projects in Peru and working closely with private and government entities through Core do Peru,” Luis Sandro Saenz Vasquez, the general manager of Neogrid’s operations in Peru, told Nearshore Americas this week.

Promperu’s work in organizing the Service Summits “was very important for us because it gave us the idea to start operating in Peru,” said Neogrid’s Regional Director Bruno Teixeira, who attended this year’s Service Summit. Upon investigating the Peruvian market, Neogrid realized that it could be “a very successful option,” Teixeira said.

Following this encouragement by Promperu, Neogrid sought to capitalize on Peru’s nascent electronic factoring market. E-factoring, as it is known, is a form of paperless invoicing, with all transactions taking place online. Thirteen of the world’s 25 largest retail companies already use Neogrid solutions, corresponding to $1.2 trillion USD in electronic transactions.

Replicating the Brazilian Model in Peru

Since the Brazilian government introduced e-factoring through the Electronic Public System in September 2006, Neogrid has experienced a 32% rise in business from small and medium enterprises. It now handles 67% of all e-factoring in Brazil, its largest market, according to the International Data Corporation. By eliminating the need for paperwork, mailing costs and storage, Neogrid has brought its Brazilian clients savings of up to 85% in factoring costs.

“This case could be replicated in Peru, with consequent positive effects on the economy,” Lolimsa CEO Rolando Liendo told the Peruvian press. In Peru, e-factoring services will be worth $8 million to $10 million USD in the next five years, Neogrid and Lolimsa estimate.

2013-06-21 Peru II 004
At the PromPeru booth, David Edery, head of export services, joins NSAM’s Kirk Laughlin, one of the international guests speakers at Peru’s Services Summit.

Neogrid and Core do Peru agreed to cooperate in the development of new products in the field of e-factoring invoicing and the electronic supply chain. The idea was to focus first on the health sector (hospitals, clinics, medical centers, pharmacies and laboratories), before expanding the model to other sectors. Under this strategic alliance, Core do Peru serves Neogrid’s existing multinational clients in Peru, while also working to attract new ones.

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In March 2012 the two companies held a seminar in Peru outlining the benefits of e-factoring, such as cutting costs and streamlining business transactions. Neogrid and Core do Peru then signed another agreement the following month, without revealing its value. In July 2012, Neogrid revealed that its e-factoring solutions had been adapted to meet the requirements of the Peruvian tax authorities and in October 2012 it announced the expansion of its operations in Peru.

Entering the Peruvian market has already provided Neogrid with the opportunity to represent major clients such as Grupo Belcorp, the second biggest cosmetics company in Latin America and one of the five biggest in the world.

“Belcorp needed a very solid company with a lot of experience in the field of electronic factoring, above all one that is capable of handling a grand volume of factoring,” Saenz explained.

Having made inroads in Peru through e-factoring, Neogrid can now consolidate its position by introducing the other services and solutions it can offer clients.

“Electronic factoring is just one of the solutions we offer,” Teixeira explained. “We also provide call data records (CDR) solutions and electronic data interchange (EDI) solutions. Electronic factoring is just the first step toward other solutions that we can work on with Core do Peru.”

Duncan Tucker

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