Joel Martin — HFS Research[00:21]
Hi, Joel Martin from HFS. Today, we’re talking about the nearshore advantage of IT outsourcing in the age of technology arbitrage. This is a paper that I authored and is being published right now. It’s really fascinating because it really changes the mindset of how you partner. And joining me today for this discussion is Stephanie Moore, the US VP of Marketing for Softtek. In the marketplace right now, we’re really seeing several things that came out of the research. This shift in services companies—they have leaned themselves down and now they’re looking for partners who are really able to collaborate with them, share cultural values, take advantage of being in time zone to work. And then what we see is a focus on how technology is being arbitraged. We’re not moving people off; we’re looking for people that can leverage their engineering skills, their app management, the customer support skills in a way that really ties back to the business, and those are key findings in our research. I’m really curious, because I want to talk to you a little bit more about Softtek. Maybe you can start by introducing Softtek for those that might not be as familiar with them as I am, but I want you to also talk a little bit more about how Softtek’s nearshore model facilitates that real-time collaboration and what advantages you’ve seen this bring to your customers and other IT leaders?
Stephanie Moore — US VP of Marketing, Softtek[01:15]
Thanks, Joel. Yeah, well, first of all, we were founded in 1982. We initially were a service provider to the Latin American market, and in the late 90s, early 2000s, when the offshore outsourcing craze was really growing here in the United States and in Europe, the idea of providing skilled IT services from Mexico became a really important idea. And in fact, Softtek is recognized as the founder of the nearshore movement, if you will. Softtek today has about 15,000 employees. We’re very focused on our customers and on developing applications, creating solutions, innovating on their behalf, while at the same time optimizing the back end of their technology stack, which may be legacy in nature. I think today’s Softtek is really very well regarded by its clients. And I think if you talk to our clients, and I think you did, Joel, you find that culturally we’re really aligned with them, and we’re very engaged with them on a daily basis—not just the developers and the technical and business consultants that work with them, but also some of the executives that actually run the company.
Joel Martin — HFS Research[02:48]
I was fortunate to talk to a lot of your customers. Two customers that I spoke to that were interviewed and covered in the research that I mentioned were Chubb and 24 Hour Fitness. And both of them cited something that I thought was really interesting—that nearshore collaboration gave them access to dynamic talent pools. These are companies that have seen a lot of growth over the last two decades, and their relationship has really been powered by access to those dynamic talent pools. What has been your experience with how enterprises can address their evolving technology needs with dynamic access to talent?
Stephanie Moore — US VP of Marketing, Softtek[03:37]
You know, Softtek is, of course, the number one IT provider in Latin America. In Mexico, we are the preferred IT provider. So you start with good talent who wants to be both at Softtek and at a Softtek client organization. But that’s not good enough, because as you point out, the needs are dynamic. It’s constantly shifting. So Softtek has really deep relationships with universities in the area—in Mexico, in Colombia, in Argentina—and in addition, we invest tons of money in our ability to train our staff in new technologies, in technology period. One of the things we found is that sometimes the talent that we have access to aren’t necessarily engineers when they meet us. In many cases, they’re young still; they haven’t maybe had the experience of somebody with a computer engineering degree. But we have a program at Softtek called Codalage, where we actually focus on younger or underprivileged, I guess I would say, technologists, and we work really diligently to bring them up to speed on technology, on business process, on the way a business environment works. And we’ve had great success with graduating folks from our Codalage program into bleeding-edge technology environments. And the reward, I think, for all of us and them is that in many cases, particularly in Mexico, these programs and the success boost the entire family, not just the one or two people that are able to make their way into the technology sector. So it’s a really exciting part of our overall culture at Softtek.
Joel Martin — HFS Research[05:39]
Now, of course, the conversation can’t happen without a discussion on AI. You have these dynamic talent pools of people. How are you empowering them with AI? And then how is that translating into business value for your customers?
Stephanie Moore — US VP of Marketing, Softtek[05:39]
Yeah, of course, it’s all about AI today. And I think there are two really good use cases. The first is a use case that companies like Softtek, I think by and large, are all either using or trying to use, and we’ve had great success—and that is using artificial intelligence and machine learning to improve the software development life cycle, to improve our ability to develop code, to test code, to innovate, to develop infrastructure. Innovations, if you will, that weren’t possible before. And the results of that are huge. It really is, because the technologists, the developers, not only are maybe faster at what they do, the quality is just naturally higher. And so productivity is naturally higher, and the service that the customer gets is much, much better. It really is a revolution in terms of thinking about the product of development not being the product of just artistic brilliance. It is now much more scientific in terms of the right way to develop code, the right architecture that would support certain types of systems and environments. So that’s one use case, which, as I said, is really exciting, and it’s great for our employee satisfaction, if you will. When we give them better tools, better ways to do what they need to do, they love it. They don’t want to spend time documenting code. They don’t want to spend time running zillions of test cases. So a lot of these technologies allow them to enjoy their job better. I think the other one that’s interesting, of course, is how do we use AI to help our clients do cool things. And one in particular that I really like is the Mexican Social Security Organization, or the national health system, if you will. It covers about 45 million people. And we’ve been able to develop what you would call a co-pilot for doctors, and it allows them to use technology to rapidly understand why their patient is in the office, understand what drugs, what treatments the person has had before, understand what drugs or treatments maybe family members who have a similar hereditary condition have had before. And it really does a couple of things. One is, it makes the doctors more productive; they can see more patients. Now you say, oh great, so you’re shoveling patients in much faster with this new cool technology, but actually the patients wait less time than ever before, and they’re able to have a much more productive conversation with the doctors, because the doctors are able to understand better what the patient is dealing with. And I think that’s probably our most recent, most exciting gain that we’ve been able to deliver from artificial intelligence.
Joel Martin — HFS Research[09:11]
I think that’s a great example, because it brings in the people aspect as well as the AI aspect, working together, as we covered in the report—that’s one of the advantages of nearshoring. I’m curious, I heard this from 24 Hour Fitness, and they talked about the importance of those managed teams. In some cases, the Softtek teams had been with his business longer than his own hires. And I really feel that example you just shared about the Mexican medical health system and embedding those teams to understand what the doctors need and develop tools around that. But are there some other advantages that you can point to around nearshoring in terms of that timeliness to work together, those shared cultural values, and experiential values of living in the market that really differentiate Softtek and your business model?
Stephanie Moore — US VP of Marketing, Softtek[09:26]
Absolutely. You know, when you think about 24 Hour Fitness, which is one of our favorite clients, a great client, our ability to help them as well as we do is, of course, because we share not just a culture—because, you know, we’re across the border in Mexico and we use similar technologies and watch similar television programs—but the way Softtek works is that our teams get embedded with the client. And culturally, we become very similar. We understand the client’s culture, they understand ours, they meld, and decision making is so much easier when you understand all the different components that might come into the decision-making process. So it’s a lot easier to be successful with those decisions, often because everybody involved in the project or in the environment has the same understanding of what the answer should be, knowing all the different players in the different environments. So I think that’s not just 24 Hour Fitness. We have, you know, GE is one of our first and most beloved clients—one of our first US-based clients when we began to do nearshore outsourcing. And they’ve been our client for some 27, 20-something years, don’t quote me. But it is amazing how a Softtek employee who has been there at one of our accounts in Atlanta has been there for 26 years since he was a fresher, if you will. And so he knows the GE environment, he knows the Softtek environment, and interestingly enough, that whole project team is neither GE nor Softtek. And it is that longevity that is very, very important. I’m not saying that’s what we do with all of our clients. I’m not saying that’s possible. But I think culturally, Softtek is happy to have those types of engagements, so that they solve a lot of problems related to things like turnover and cultural bias and things like that.
Joel Martin — HFS Research[12:18]
Last question for you, because this is something that we haven’t talked about yet, but something that struck me very clearly in my engagements with you and the other Softtek leadership, as well as some of your support teams and your customers: passion. One thing that has come up in every conversation has been how passionate your organization is, from the CEO to that fresher you just gave an example of, about doing their job well and making the customer successful. Tell me a little bit about why passion is such a core foundational element of the Softtek culture, and how you leverage that in your executive-level engagements and every single customer engagement that your teams have with your clients.
Stephanie Moore — US VP of Marketing, Softtek[12:50]
It starts at the top, OK. Blanca, our CEO, is super passionate. She is so focused on making sure our clients are happy. She’s so focused on keeping our clients. She’s so thankful that we’re part of our clients’ families. And I think what you find is that not just Blanca, but all the executives at Softtek want to be involved with the clients. They want to be, for example, in quarterly business reviews. How many CEOs go to a random client’s quarterly business reviews? But you find that happening here at Softtek, because the executives want to stay in touch. They know that their presence with the client is appreciated by the client, but it’s also appreciated by the Softtek customer teams. They like having their executives engaged, involved, and impressed by how they’re handling their clients. So I think it really is different than a lot of other companies, but I think that passion translates from the top all the way to the bottom.
Joel Martin — HFS Research[14:23]
I think you’re spot on, and like I said, I’ve seen that from your airline customers, your CPG customers, your retail customers, your public and private sector. There’s just so much passion that goes into everything everybody does there. It’s been a great discussion. We talked about the importance of passion, and I really see that in the engagement—everyone I talked to is so passionate about building something new, contributing, and solving business problems. Your willingness to take on new technologies and incorporate them into how they benefit your team and allow your team to drive the IT and the business outcomes of your customers. FRIDA, which we didn’t talk about, which will be highlighted in the report, is a great example of a sensible way to incorporate AI into how you work so that it can be used. And then lastly, that teams aspect—you know, you’ve got folks that understand the challenges your customers are dealing with all across the Americas, local teams in Europe, local teams in Asia and India, so they’re working in time zone to solve problems when their partners are at their best. And I think that accelerates and drives the kind of outcomes that customers really value at the end of the day. Thank you, Stephanie. Great conversation, and I’ll look forward to seeing you soon.
Stephanie Moore — US VP of Marketing, Softtek[14:45]
See you soon. Thank you.
