Nearshore Americas

Q&A: TCS Opens in Guatemala as Nearshore Demand Surges

Tata Consultancy Services (TCS) has chosen Guatemala as its new Latin American location, breaking into Central America for the first time.

The last time TCS expanded in Latin America was with its move to Peru in 2012. But in this new reality, complicated by the pressures and demands of the pandemic era, Guatemala has been chosen as the site to provide additional muscle that the Indian powerhouse needs to keep up with its impressive regional growth.

Rajeev Gupta, Head of TCS’ Nearshore Business Unit for Latin America, tells Nearshore Americas why Guatemala’s talent, position and potential provide another string in TCS’ Nearshore bow, as demand for its Nearshore services increase.

Nearshore Americas: What were the key motivations behind choosing Guatemala as TCS’ next step in Latin America?

Rajeev Gupta, Head of TCS’ Nearshore Business Unit for Latin America

Rajeev Gupta: As of now we have operations in eight countries across Latin America, employing over 21,000 consultants working for more than 300 customers. In 2Q21, the region’s growth rate was very strong at over 15%.

The last time we opened operations in a new country was in 2012 in Peru – almost a decade ago. Guatemala’s opening is important for us to share and talk about because of the huge detail exercise we do when researching and selecting a location to expand into. As talent is the only asset we have, the country’s talent pool and its value adding properties that TCS will leverage operating there is vital. These factors help us to determine that this is going to be a long-term initiative from our side. 

It took time to evaluate this. While we already have a strong presence in both South America and North America, this isn’t the same case in Central America. We were looking for opportunities in several countries but Guatemala fits in with our strategic needs, particularly from the Nearshore point of view, in terms of excellent talent that is attuned to the Nearshore needs with its bilingual abilities. Guatemala’s timezone and cultural affinities are also important in this.

There is already ecosystem of multiple Nearshore-providing organizations here in Guatemala, which helps our entrance.

Perhaps most importantly is the support we’ve received from the government, which has been excellent. We met with President Alejandro Giammattei and key ministers. Everyone has been extremely helpful to set up in the country and grow organically from there.

Nearshore Americas: How well-equipped is Guatemalan talent for TCS’ needs?

Rajeev Gupta: At the moment we are focusing on what we call Cognitive Business Operations (CBO), so very domain-intensive back office work, including complex operations around finance and accounts, Human Resources, or in legal. Based on our evaluation and analysis we saw a lot of talent in Guatemala that has these expertise, as well as accent neutral bilingual competency we need. This makes Guatemala a sound location from which to provide CBO to our US clients.

I foresee that our entrance into Guatemala will also create interest in the country amongst other players; we will be leading the charge — Rajeev Gupta

The immediate ramp up will involve the hiring of around 150 consultants. In parallel, we’re working with other partners for those ramp up plans.

Nearshore Americas: How does the pandemic complicate TCS’ entrance into a new market?

Rajeev Gupta: The number one challenge is in engaging people when working in a remote fashion. At TCS we use the Secure Borderless Workspace (SBWS) operating model. This is especially important for employees who started with us over the pandemic, who don’t have the experience of older employees who were already engaged with us, knew our vision, our value system and what TCS can offer to them in terms of their career, opportunities and learning. The moment we have to ensure that these points are communicated to brand new people, who may not have ever been to our physical facilities or spent time with their managers are peers, the challenge increases.

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The good thing is that our SBWS model is focused on collaboration in real time, and working in teams in an independent and Agile fashion, while being happy and productive. 

But all of these points were as true for Guatemala as they were for any other country where we already had operations.

Setting up a new operation does bring additional needs, in terms of setting up our entity or addressing operational needs like labor and law requirements, building relations with local authorities and setting up close relations with the university systems of the country. Other factors like fulfilling our core values of corporate social responsibility. These are steps that we continue to work on in Guatemala. 

Nearshore Americas: How will Guatemala be integrated into TCS’ operational structure and enhance the company’s regional muscle?

Rajeev Gupta: Countries like Mexico and Uruguay are the core Nearshore locations for TCS in Latin America up to this point. Guatemala adds to this strength. These locations don’t work in silos but complement each other in areas like technology, domain skills and business continuity to spread risk. It also helps us create a faster ramp up process, as it provides the muscle we need to onboard teams and keep growing at the same pace.

Nearshore Americas: Does TCS’ entry into Central America point towards expansions in the region?

Rajeev Gupta: What we witnessed when we entered Mexico in 2003 was that once we settled, we saw other global companies and Indian companies entering the Mexican market and establishing operations there. I foresee that our entrance into Guatemala will also create interest in the country amongst other players; we will be leading the charge. Of course, this is a company-specific strategy but I do hope that Guatemala will gain new additions to its IT and non-IT ecosystems. This is a value adding ability that we provide to the country. 

In the post-pandemic world we are seeing huge interest from our global customers, and North America specifically, to more seriously invest into Nearshoring. We have invested into and prepared ourselves in areas like Agile, the cloud, artificial intelligence and the entire digital area. We will keep investing and maturing our offerings from Mexico and Uruguay, or indeed our latest addition of Guatemala. The future looks bright for us in Latin America and customers are acknowledging what Latin America can offer them. 

Peter Appleby

Peter is former Managing Editor of Nearshore Americas. Hailing from Liverpool, UK, he is now based in Mexico City. He has several years’ experience covering the business and energy markets in Mexico and the greater Latin American region. If you’d like to share any tips or story ideas, please reach out to him here.

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