How Shared Service Centres Add Value to Business with Nelson Gonzalez | Travel Leaders Group #17
Once upon a time, there was Outsourcing – basically, contracting an overseas company to do your back room operations such as processing invoices, or to operate a call centre. They were – and still are – usually in a developing low cost country such as India or the Philippines. That’s now often referred to by its three letter acronym, BPO, for Business Process Outsourcing.
Some, mostly larger, businesses set up their own overseas operations, creating the terms Insourcing or Offshoring.
In recent years those operations have matured and progressively enhanced the scope of work they carry out. Their staff working in the more routine areas have gained experience, local management has progressed and they have taken on more advanced work such as Research and Development.
Often, they’re no longer sited in the lowest cost countries, but strategically located where they can deliver the best value to the business, based on skills, languages and time zone. With all these developments, they’ve also gained a better name – Shared Service Centres, abbreviated to SSCs.
There are quite a few Shared Service Centres at the Aguada Park Free Trade Zone in Montevideo, Uruguay. On a recent visit there, I met with Nelson Gonzalez, the General Manager of Travel Leaders Group’s Global SSC. As you’ll hear in this podcast, this has developed and continues to grow, and it’s a great example of how Shared Services Centres can play a critical role in business success.
Nelson Gonzalez is the General Manager of Travel Leaders Group’s Global SSC in Montevideo, Uruguay. Under his leadership, the SSC provides ITO, BPO, and KPO services to all of Travel Leader Groups’ businesses and brands. Mr. Gonzalez’s career spans over 20 years within several industries, including, Travel & Leisure, Software Applications, and Telecommunications. He holds a Bachelor of Science degree in Business Management and a Master of Business Administration.
Web Sites and Links
Information on Uruguay: https://www.investinuruguay.uy/en/
Aguada Park Montevideo Free Trade Zone: https://www.aguadapark.com/
Travel Leaders Group Website: https://www.travelleadersgroup.com/
OLIVER: I’m with Nelson Gonzalez, the General Manager of Travel Leaders, a global services company based here in Aguada Park, one of the Free Trade Zones here in Montevideo. Nelson, welcome to the ‘Growing Through International Expansion’ podcast.
NELSON: Thank you.
OLIVER: First of all, tell us a little bit about what Travel Leaders does?
NELSON: Right. So, the best way to describe this is a distributor of products and services in the travel industry, based off North America. Also, Travel Leaders has a pretty big footprint in the United Kingdom hosting other countries in the world. Primarily we have agreements with suppliers of products and services in the travel industry such as airlines, cruise lines, hotels and tours and car rentals, things like that, and then we turn and offer those products to agents and agencies that then sell to travellers and users of those services and products. So, it’s a congolomerate, it’s a company that has a lot of different business units that provide a unique way for people to get to this product. So, you can have luxury planes, you can have corporate travel, you can have just a host agency, and even just someone that wants to make some money on their computers, I guess. They start very small and then move on to better things. There’s all sorts of ways that a company with a person can sell travel services, whether it’s an agency or some other clientele that they have. Then obviously we have a business model that will help you sell in that particular category or channel or where there’s also a franchisees and agencies model. There’s even a consortium model, so there’s different models and pretty much everything is covered by Travel Leaders Group.
OLIVER: So, in some way you are sort of the power behind all of these travel websites that we see?
NELSON: Travel leaders Group owns a lot of websites, very well-known websites in the industry. Obviously, that makes it better and a lot of people maybe don’t know that that those websites are owned by Travel Leaders Group, but there certainly is a way for us to get more traffic.
OLIVER: So, what do you do down here in Montevideo?
NELSON: So, this site is a Shared Services site. We offer our services to our headquarters in the United States mainly, and we provide different services. Obviously the most common IT services, but also we provide KPO, BPO and ITO. So, a lot of things have developed and have evolved into what we are today in Montevideo.
OLIVER: How long have you been based down here?
NELSON: Travel Leaders Group has been here since 2011. It started as a small site with 10 people, mostly doing business process, which is processing and accounting and things like that. Then, as the company looked at improving the way that they were delivering the services to their agents, they’ve started consolidating other segments in Montevideo beyond the original business process capacity.
OLIVER: So obviously Uruguay was working really well, and you’ve grown. How many people do you have now?
NELSON: Right now we are 80 people, which for Uruguay is considered a mid to big services company. Remember that everything is knowledge based, so we’re not producing gadgets or anything like that. It’s not as if it’s a high-level type of work, but then 80 people in an industry like that for Uruguay is a lot.
OLIVER: And from Travel Leaders headquarters’ perspective back in the States, how do they actually sees the job being done here, is it from the viewpoint of it being done better, being done cheaper or a mixture of both or time zone? What are the advantages of being here?
NELSON: If we look back in the past, back in the 80s, when companies looked into shared services, they wanted to do it maybe in India, they wanted to go to the Philippines, they wanted to go into low cost, low price places. That was the main driver, and trying for the cheapest place that you can find with some people that could do the job, and that will be enough. Today there are several levels of maturity that you have in a Shared Services Centre. Where you’re looking at shared services, not just as a low-cost avenue but also as being a big part of your strategy. If you want to do value added activities, it’s not really about low cost anymore. You try to keep it low, but it’s about the overall value of the talent more than just being low cost. So, for us, for Uruguay in particular, you know, always it’s cheaper than if you do it up in the North, but it’s not the main driver, as it’s not being seen as a cheap place anymore. The main driver is the talent. There are now a lot of areas of the business that we’re doing completely from Uruguay, so we don’t have a counterpart in, say, the United States. That’s what I say about levels of maturity, you go from having maybe a manager in the United States managing people overseas to having the manager overseas. At that point we manage the whole service end to end.
OLIVER – so they’re entirely managed here?
NELSON: We’re actually at different levels of maturity on the services we provide. There are some services that obviously require some functional management. So, then you keep that, you will try that. You try to be as autonomous as possible. You will keep that, and others that can completely be done very easily be done overseas, so that’s what we’re going to continue to do. A lot of the practice today in shared services is going into that direction. We’re slowly migrating into that role.
OLIVER: Do you actually have to also run shifts to cover different time zones or is that not an issue?
NELSON: Yes about time zones. Uruguay right now is 2 hours ahead of Eastern time. With daylight savings time, we’re just one hour ahead of Eastern time, so the time zone is very good. It allows us to be up and running before people get to work in the United States.
OLIVER: It’s always an advantage.
NELSON: Also, essentially we would really cover two shifts, if you look at the old way of looking at shifts. I mean we’re not a factory, but thinking that way, we also cover even Californian time very efficiently. I would say this is important, but is not the most important part. Obviously, if we’re talking about competing with India, who happen to be way on the other side of the world, the time zone makes it very difficult for them. So, we have an advantage on that. No question about that especially for North America, it’s a pretty big benefit.
OLIVER: Nelson, thank you so much for talking with me here on the ‘Growing Through International Expansion’ podcast. I wish you every success and I hope the next time I see you, you have 160 people.
NELSON: Thank you very much. Thank you for having me.
KPO – Knowledge Process Outsourcing
ITO – Information Technology Outsourcing
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