Innovation and Outsourcing
Innovation and Outsourcing
Innovation and Outsourcing
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The 15 th Annual Georgia Tech Global Business Forum:<br />
Brazil <strong>and</strong> Its Markets: Opportunities <strong>and</strong> Strategies for U.S.<br />
Based Firms in a Restructuring World<br />
Atlanta, April 8, 2009
INNOVATION AND OUTSOURCING<br />
Difficult economic times require innovation<br />
Outsource, Nearshore, Offshore<br />
Nearshore in Brazil<br />
About Stefanini
Difficult Economic Times – what companies can do?<br />
• Historically, i in times of economic pressure, companies cut budget tdeployed<br />
d<br />
for learning <strong>and</strong> development (L&D).<br />
• Cost cutting is rarely an initiative with a long lead time. It dem<strong>and</strong>s fast,<br />
decisive action.<br />
• A typical scenario is for the corporate finance office to require each<br />
operational unit to deliver within two weeks a list of options for reducing<br />
costs by 5%, 10% <strong>and</strong> 15%.<br />
• The current tough economic condition is driving many companies to look to<br />
outsourcing as primarily a cost‐cutting cutting initiative<br />
WHAT IS THE BEST STRATEGY?
<strong>Outsourcing</strong> – onshore, nearshore <strong>and</strong> offshore<br />
“<strong>Outsourcing</strong> is contracting with an external firm for the<br />
ongoing management <strong>and</strong> delivery of a defined set of<br />
services to a prescribed level of performance.” (Gartner)<br />
1) Domestic:<br />
On‐site<br />
Off‐site<br />
2) Nondomestic<br />
Offshore<br />
Nearshore<br />
<strong>Outsourcing</strong> does not always mean sourcing services from other<br />
countries ti
Brazil as a viable alternative<br />
Gartner predicts that “By 2012, of<br />
the BRIC countries, China will be<br />
the leading India‐alternative<br />
offshore location for highly<br />
scalable resources, followed by<br />
Brazil”.
Brazil overview<br />
Countries with area<br />
> 4 million km²<br />
Australia<br />
France<br />
Canada<br />
Germany<br />
Bangladesh<br />
Russia<br />
Nigeria<br />
USA<br />
Pakistan<br />
China<br />
Spain<br />
Italia<br />
Brazil<br />
South Korea<br />
Countries with population<br />
p<br />
> 100 million<br />
Indonesia<br />
India<br />
Japan<br />
Mexico<br />
Netherl<strong>and</strong>s<br />
UK<br />
Countries with GDP<br />
> US$ 1 trillion
Nearshore in Brazil - Strengths<br />
• Favorable time Zone for U.S. companies<br />
Enables communications <strong>and</strong> interactions during the same business hours <strong>and</strong> problem resolution<br />
with a much shorter elapsed time frame.<br />
• Geographic Proximity to the U.S.<br />
Results in shorter travel time <strong>and</strong> lower costs <strong>and</strong> it is a real advantage for buyers that have<br />
complex requirements or require regular face‐to‐face contact with part of the delivery team.<br />
• Cultural Affinity<br />
Cultural affinity, or lack of it, will directly affect the success of important business interactions.<br />
Facilitates smoother <strong>and</strong> more‐effective interactions, which reduce costs by decreasing<br />
management efforts.<br />
Business practices are influenced by American <strong>and</strong> European multinationals; several multinational<br />
Business practices are influenced by American <strong>and</strong> European multinationals; several multinational<br />
shared services <strong>and</strong> development centers are established in the country.
Nearshore in Brazil - Strengths<br />
• Labor pool<br />
Relatively lower attrition rates reduce training requirements <strong>and</strong> leverage<br />
organizational knowledge.<br />
Due to Brazil's dynamic economy, much of the Brazilian workforce has a good level<br />
of exposure to business practices <strong>and</strong> difficult requirements from dem<strong>and</strong>ing<br />
industries.<br />
• Education<br />
The literacy rate for people 15 years <strong>and</strong> older is over 90%. Eight years of education<br />
are m<strong>and</strong>atory.<br />
The government spends 4.1% of GDP on education today. But stated plans are that this<br />
will reach 5.0% 50%in 2012.
Universities Partnership<br />
Stefanini-PUC<br />
Development Center<br />
Boa<br />
Vista<br />
RR<br />
AP<br />
Macapá<br />
AC<br />
Rio<br />
Branco<br />
AM<br />
Porto<br />
Velho<br />
Manaus<br />
RO<br />
MT<br />
Cuiabá<br />
MS<br />
PA<br />
Campo<br />
Gr<strong>and</strong>e<br />
PR<br />
Curitiba<br />
Belém<br />
TO<br />
Palmas<br />
DF<br />
Brasília<br />
GO<br />
Goiânia<br />
SP<br />
São<br />
Paulo<br />
São Luís<br />
MA<br />
MG<br />
Belo<br />
Horizonte<br />
Teresina<br />
PI<br />
BA<br />
Fortaleza<br />
CE RN Natal<br />
PB<br />
PE<br />
SE AL<br />
Maceió<br />
Vitória<br />
Rio de Janeiro<br />
Aracaju<br />
Salvador<br />
João Pessoa<br />
Recife<br />
Stefanini-Unisinos<br />
Development Center<br />
RS<br />
Porto<br />
Alegre<br />
SC<br />
Florianópolis<br />
PUC-RS
Nearshore in Brazil - Strengths<br />
• Infrastructure<br />
Brazil is South America’s largest telecommunication market<br />
More then 40M installed fix lines <strong>and</strong> more then 140M mobile subscribers<br />
Broadb<strong>and</strong> connections are currently 10M – expected growth of 35% during next 5<br />
years<br />
High quality fiber optics networks connect all major cities <strong>and</strong> with hubs abroad<br />
• Furthermore...<br />
• There are almost no natural disasters in the country<br />
• Diverse population with no major ethnic or religious conflicts<br />
• No disputes with regional neighbors<br />
• No terrorist operations or attacks
Stefanini - Facts<br />
• Privately owned with 22 years of operations, 13 years of international<br />
presence, 8 years in the U.S.<br />
• Global Presence: 36 offices in 16 countries<br />
• N. American offices: Atlanta, Ft. Lauderdale, Chicago, NY, Montreal<br />
• More than 7,400 employees<br />
• $285M USD in revenues, never had a loss, grew 35% in 2008<br />
• 320 + active clients, from Mid‐sized companies to Major Fortune 500<br />
Enterprises<br />
• The largest Brazilian native IT consulting company
Client Testimonial
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