Politec: Southern Charm - Alexander Schmitz-Kohlitz

As IT providers improve the reach and quality of their services and corporates seek greater value and flexibility, Politec’s Alexander Schmitz-Kohlitz tells CEO about South America's continued growth as an outsourcing destination.

CEO: How do you feel the current economic conditions have changed the way corporations look at outsourcing and the need to make it an essential part of their strategy?

Alexander Schmitz-Kohlitz: We increasingly see mid-size companies looking at outsourcing and offshoring. Over the last few months there have been many opportunities for nearshore providers. For instance, traditional offshore customers that source in India are increasingly looking for alternatives that occupy their time zone. Equally, mid-size companies that have never off-shored before are now looking to nearshore providers.

With the continued rising costs of traditional outsourcing destinations such as India, many countries are now jostling to become the next offshoring ‘hotspot’. What do you think has been the cause of these shifts and how has Brazil reacted?

There is a strong trend towards nearshore providers, but not necessarily driven by rising costs in India. There have been issues over quality triggered by the large time difference between the US and India, along with political instability. We do not have these problems.

What continues to mark Politec out as a viable destination for US and European companies to outsource to?

In general, we have a strong financial services capability. In areas such as utilities, telecommunications, oil and gas, Brazil is on the same level as European and US markets. Also, Brazil shares the same time zone as the US, while Europe shares what we call a ‘cultural proximity'. We also have the benefit of low prices and an excellent track record.

Do you think there are still too many misconceptions about outsourcing business to Brazil?

Definitely, although this is thankfully changing through initiatives such as Brasscom (the Brazilian NASSCOM) and Brazilian companies that are increasingly developing their presence outside of the country.

What would your best customers say are the reasons they continue to business with you?

We walk the walk. We always deliver on our promises and offer excellent technical skills. We also have a very high-level of customer service.

Politec has recently acquired two companies, one of which is a major IT provider for the utilities industry in Brazil. How is the integration going?

Very well. Both companies not only fit with Politec from a customer and portfolio aspect, but also from a cultural aspect. We intend to buy more companies in 2009 and expect good opportunities due to the financial crisis.

You recently began operations in Chile. How is that going?

We officially started operations on 2 January, hiring our managing director, Francisco Larraguibel, a highly respected professional in the Chilean market. Our official opening will be in the beginning of April. Politec Chile is based inside the offices of Mitsubishi Corporation, our shareholder, which helps us enormously when it comes to meeting customer

Was there a reason you decided to concentrate on SAP consulting services with your Chile operations?

SAP is one of the most attractive market segments in the region and one in which Politec has a lot of experience. We are part of SAP’s Latin American President’s council, a club of the six largest SAP partners in the region. We can leverage our presence in Argentina and Brazil.

Your plan has always been to have operations in most of Latin America. How important is the domestic market for Politec?

If domestic means Latin America, then it's crucial. Our multinational customers require us to have a strong presence in the region in order to be able to serve them locally. IT is crucial for us to ensure that we are seen as the top player in the region.

How do you see the general enterprise outsourcing market evolving over the next few years?

The traditional market is becoming increasingly commoditised, and customers and buyers are now more sophisticated. We also see more players going into the market, making it more crowded. In order to succeed, suppliers have to enrich their outsourcing services and add more value in offering a transformational as well as innovative approach to services.

Alexander Schmitz-Kohlitz, international vice-president of global IT services provider Politec.