Editor’s Corner: Starting a New Nearshore Supplier | Article

A Conversation with Alejandro Graham, President, and Roger Pena, SVP and CIO, Accedo Technologies SA

Alejandro Graham, President, and Roger Pena, SVP and CIO, Accedo Technologies SAIn today’s economy, the majority of companies are cutting back to survive the downturn. But Graham and Pena are bucking the trend and starting a new company. They have their own financing and have already spent $6.2 million building out their $10.3 million International Technology Park and BPO delivery center in Managua, Nicaragua. It opens this month. Here is why they feel confident they will succeed.

Q: Who is Accedo Technologies?
A:
We are creating a high-end technology park and BPO services company based in Nicaragua. Our goal is to serve Fortune 100 companies in the United States and Spain in both the English and Spanish languages.

Q: Given the timing, why are you confident that you will succeed?
A:
We believe we are in the right place at the right time with the right offering. We are both banking veterans. Alejandro has been a bank CEO for many years and is an expert at managing people. Roger built 20 high-end contact centers using advanced technology with an average of 550 seats for U.S. banks for the last 25 years. Both know the banking sector, which is the company’s main domain expertise.

Second, we believe our timing is right. We think we will see outsourcing business pick up in the next six months because U.S. companies are trying to lower their BPO costs and further reduce their current operating expenses. To succeed in these turbulent times, companies must return their focus to their core competencies and transfer non-core functions to outsourcing suppliers. Of course, no one knows for certain which way the economy will go. But the indicators we see suggest a huge opportunity for the BPO industry may start in the second quarter.

Third, we see a huge interest in nearshore outsourcing. Buyers like the ability to work in the same time zone (Nicaragua is in the Central Time Zone) and the geographical proximity in case they need to travel.

Fourth, we both have expertise in running businesses. Buyers are sometimes wary of start-up companies because they worry they can’t deliver. But that’s something we know how to do well.

Finally, our service offering goes beyond processing inbound/outbound calls, performing data-entry functions, or simply processing documents. We will work with our buyers to improve their workflow process, augment their customer loyalty, and maximize their return. We are willing to share both the risk and the profits resulting from our process precision and performance with our buyers.

Q: Do you see the economic downturn as an advantage?
A:
Companies will go back to the drawing board. They will use this down time to reshape, rethink, restructure, and reengineer. That creates a tremendous opportunity for us.

Q: How did you get financing in this market?
A:
We are self-funding the company.

Q: Why will buyers want to take the risk of working with a start-up?
A:
We plan to mitigate that risk by forming joint ventures with Indian suppliers that have already penetrated the U.S. market. We are currently talking to outsourcers that have U.S. clients. We predict these joint ventures will bring us business a lot earlier.

Q: What do you offer the Indian suppliers?
A:
Indian companies need to become more global. They don’t have to assume the risk of opening a new country since we already lined up everyone we need in Nicaragua. We are assuming all the labor and operational risks in the joint venture.

Also, we think the recession is forcing Indian suppliers to study their own business model. Until now, they were in a growth market. Contracts were all about price, the number of FTEs, and the number of countries they operated in. Today it’s all about efficiency. Indian suppliers will have to rethink their business.

We can help them. We think we are a good compliment to the capabilities they already have. We can give them better cost. And we can give them new geographies like Spain. Not many Indian suppliers are serving the Spanish-speaking market. We believe Spain is to Latin American what the United States was to Indian suppliers 10 years ago. In addition, we can serve the Spanish-speaking customers these suppliers already have in the United States. We give them an easy way to plug into this market.

Q: Do you plan to enter any markets on your own?
A:
Yes. We are approaching U.S. companies ourselves. In addition, we are marketing our services to the top 50 companies in Spain. We have business ties with decision makers in both countries who know and trust us, so it won’t be that much of a leap to do business with us.

Q: Why Nicaragua?
A:
Both of us were born there, so we know the business climate, the government regulations, and the culture. Nicaragua has an educated labor pool that speaks both English and Spanish. In addition, members of our management team are veterans of the BPO industry who have managed large contact center operations in the United States and abroad.

Q: What was the genesis for Accedo Technologies?
A:
We started putting the company together in July 2007. Alejandro¥s family founded a local bank. They sold their share and he was looking for a new opportunity. He approached Roger, who was in Nicaragua consulting for the government. His job was to draft the country strategy for outlining how Nicaragua could enter the global BPO business. Of course, when we started the project, we didn’t know the scope of the coming economic crisis.

Q: What does the word accedo mean?
A:
We chose it for our name because it’s a double entendre. Accedo is a Latin word that means “come near,” “approach,” “move forward,” and “achieving things” in Spanish. It also means “to access.” We liked the double meaning.

Q: What kind of contracts do you foresee?
A:
Because we are a start-up, we initially may get small or pilot contracts for voice applications until we prove that indeed we have the characteristics of a big player. We are confident that within six months from the start of our operation we will be on our way to becoming a big player in the Central American region.

Q: Are there any downsides to offshoring today?
A:
You have to be sensitive to public awareness. So many Americans are losing their jobs because of the economy. We know people will be upset when they hear jobs are going offshore. We handle the job loss issue delicately.

Q: What do offshoring buyers today have to do to ensure their engagements are successful in this economy?
A:
They must do their financial due diligence. Don’t award a contract if the supplier’s finances are shaky or it doesn’t have the capital to support your growth.

Also, check out the country’s geopolitical risk. Study the legal and regulatory issues. Can it do SEC compliance? What about intellectual property rights?

Q: What do buyers want in today’s offshoring market?
A:
They want their suppliers to become their partners. They expect us to add value to the original relationship. Also, I think you’ll see buyers consolidating the number of suppliers they work with. Today some buyers are working with as many as 15 different suppliers. I think they will pare that down to two or three. That gives them better control over their operations and creates economic efficiencies since larger volumes produce better prices.

Q: What are up-and-coming trends?
A:
Buyers are demanding outsourcing suppliers assume more risk. Gain-sharing will become more important. Buyers don’t want to pay us for X number of hours for Y number of FTEs. Instead, they want us to take over their operations, improve the processes, and share the savings with them. We can do this because people get used to their familiar processes. As outsiders, we can spot the deficiencies and fix them.

Q: Roger, tell me about your history.
A:
I left Nicaragua after I finished high school. I spent the next eight years in France before immigrating to the United States. My first job was at Bank of America, where I stayed for 16 years. I focused on systems automation and development of call center technologies designed to reduce the overall operating expenses of the most mission-critical centers of the bank.

Q: Roger, what has been your biggest lesson in business?
A:
Stay focused in your business objectives, be persuasive, be proactive, be consistent, and never give up on failures.

Q: Did you have a business mentor?
A:
I’ve had good bosses in my career. A woman at Bank of America coached me in how to become a successful systems engineer, a project manager for large-scale project, and a great team leader. She taught me how to be goal oriented.

Q: What’s your favorite book?
A:
“One Hundred Years of Solitude,” by Gabriel Garcia Marquez. He’s a famous Latin American writer; he won a Nobel Prize in literature. I often read the Bible; I find it an amazing book.

Q: Alejandro, what is your personal history?
A:
I was born in Nicaragua but grew up in Panama. I went to college in Canada and majored in international studies. I came back to Latin America to go to business school at Incae, which is affiliated with the Harvard Business School.

Q: Tell me about your career.
A:
I have spent most of my professional life in Nicaragua; I am 39. I heard about Roger and his government study. I knew he had a lot of experience in this field. We started conversing and put together a partnership agreement in no time.

Q: What has been your biggest business lesson?
A:
Learning how to listen. Listening helps you find out what the other person is thinking. That understanding builds trust. Also, I learned you have to surround yourself with the right people.

Q: Did you have a business mentor?
A:
Yes, my father. He is driven by honesty and loyalty. I live by those pillars too.

Q: What’s your favorite book?
A:
“Love in the Time of Cholera,” which Gabriel Garcia Marquez also wrote. I also like Jim Collins’s book, “Good to Great.”

For more information, visit www.accedotechnologies.com or email [email protected].

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