Mexican IT services giant Softtek has long been reaping the benefits of its nearshore operations, but its success has led to continued growth on a global scale. However, while the company has expanded far into Latin America, it still holds significant weight in its home nation of Mexico.
In an exclusive interview with Alejandro Camino, Chief Marketing Officer at Softtek, Mexico IT digs into the country’s core traits that support the company’s heavyweight status in the IT industry, as well as discovering how the country could add to its advantages.
MexicoIT: Softtek’s marketing strategy used to be centered on nearshore services. Why has the marketing shifted in recent years?
Camino: Softtek started with the concept of nearshore (that we initially trademarked) around 17 years ago, when we saw the opportunity to provide IT services from Mexico to the U.S.. The idea was to close the gap between the needs of U.S. companies and what they were buying at the time, which mostly came from India.
Fast forward 18 years to today and we are more of a global company. With global delivery being part of the arsenal of every major IT services provider, we are not using the nearshore term as extensively as we used to.
Mexico IT: How do Softtek’s marketing strategies vary across different Latin American markets?
Camino: Being a Mexican company, Softtek knew the Mexican market and knew what Mexico could provide. Our first international expansion was in South America, starting with Brazil, then Argentina, Peru and the rest, so we were also very familiar with the capabilities that Latin American countries had. It was a no-brainer for us to start leveraging NAFTA and the country’s proximity to the U.S. market, which resonated a lot with U.S. companies.
Every market is different, so we have local marketing teams in each country. Although they use the same branding and marketing tools globally, they use highly customized and highly specific strategies for each market.
Mexico IT: What specific marketing strategies does Softtek use to sell services within the Mexican market?
Camino: We enjoy significant brand recognition in Mexico due to being a Mexican company and being successful in expanding abroad, so we rely on those things and our knowledge of the market. We also bring that knowledge of other markets to Mexico. The financial services market and the manufacturing and government sectors are the three biggest segment for us in Mexico; the country is just behind Brazil in terms of the largest government contracts and projects.
While we don’t enjoy that same brand recognition in Brazil, we have focused on the niche SAP market. Brazil is probably one of the top five markets in the world for SAP, so we have attached ourselves to it for many years. Now we are starting to branch out and diversify from the SAP branding in Brazil. Also, in Argentina, we don’t have the same brand recognition, but we carry out different marketing initiatives.
Mexico IT: In terms of employee count and service capabilities, how do Softtek’s Global Delivery Centers (GDCs) in Mexico compare to those in other LatAm nations?
Camino: By far, Mexico is where we concentrate the largest number of people. Overall, we have roughly 11,000 people around the globe and around 6,000 of those are concentrated in Mexico. It is logical to have this strong presence in Mexico because it is our second largest market, and because the U.S. is our largest.
No other country offers the benefits and characteristics of Mexico in terms of availability of talent and simplicity of doing business. Factors such as NAFTA, the ease of transferring money, the ease of setting up operations, good infrastructure, and the ability to leverage the branding of the country through PROSOFT have been vital for our success.
The availability of globally competitive talent is also key due to their deep knowledge of technology, the ability to learn, and a constant exposure to new technologies. There is no other country in Latin America that can offer that combination.
Mexico IT: What have been the greatest challenges of deploying and operating GDCs in Mexico, and how did you overcome those challenges?
Camino: We compete on a day-to-day basis with large Indian vendors, so when it comes to scale, Mexico would be at a disadvantage through pure demographics. Mexico has one-tenth of the volume of India, or China in some instances, so the biggest challenge we’ve had is in terms of the scale of the projects we aspire to, and is centered on the availability of talent. So, the challenges stem more from our own characteristics as a company.
Mexico IT: What specific benefits has the Mexican workforce been able to offer at the GDC, both culturally and from a skillset perspective?
Camino: With regards to culture, there are many similarities and differences, but the differences are easier to address from Mexico than in other countries. For instance, the work ethic of Mexico is aligned with the U.S., whereas Brazil has numerous holidays and a mandatory month of vacation, similar to Europe.
The familiarity with everyday culture also helps. Mexico is the second biggest market for NBA, NFL and MLB, which helps Mexican operators converse comfortably in day-to-day interactions.
Mexico does however fall a little bit short in English language capabilities, which is the toughest hurdle to cross. That will be the one downside and the one thing Mexico needs to work hard on developing. The priority for every sector is that English language needs to be taught from elementary school onwards and there needs to be more investment in this topic.
Mexico IT: On top of English language, what else can the industry do to help Mexico progress further?
Camino: The maturity of the domestic market needs to develop. There is a lot of room to grow and I’m seeing that the largest companies in Mexico are investing heavily in technology. Companies like FEMSA, Lala, and Bimbo are as competitive as any others in terms of technology.
The government has been doing a good job in involving the private sector in their contracts and also hiring local talent, which will definitely push the bar higher for more large companies in Mexico. But this is one thing the country needs more of: big players. Outside of Softtek, there is no other independent IT services company with 2,000 or more people that is not affiliated with a large conglomerate. That is an issue because there is an opportunity here that a lot of people are missing. We’re happy to be the 10,000-pound gorilla in the market, but it doesn’t do any good for Mexico.