India's Tata: Making Globalization Work

Ordinarily, discussions of outsourcing and business process automation are, to put it charitably, less than riveting. You sit in a small, climate-controlled conference room, sipping a cup of uninspiring coffee, the middle-aged senior manager approaches the whiteboard, and a little something inside you dies.

But when Gonzalo Rodriguez, general manager of Colombia's office of Tata Consultancy Services, pulled out his washable marker and launched into a discussion, I was utterly transfixed. Perhaps it was the altitude, or the caffeine and sugar. In the six hours since I had arrived in Bogota (elevation 8,400 feet) I had been plied with cups of coffee and arepas at a rate of roughly one per hour. (I'm here this week with a group of journalists attending the World Economic Forum Latin America in Cartagena.) But I actually think I was simply amazed by the irony, scope, and complexity of globalization.

Tata Consultancy Service is part of the Indian Tata complex of companies, including Tata Motors, which recently purchased Jaguar and Land Rover, and Tata Steel, now owner of Corus. It first arrived in Colombia in 2005, where it now employs 300 engineers, analysts, and support staff.

Colombia has emerged in recent years, and especially in the past year, as an island of relative economic stability in northern South America. And so the demand for IT services has risen apace. Colombia's GDP, hit by the economic crisis, grew only 0.4 percent in 2009. But a modernizing government and rising investment in the energy industries is fueling demand for TCS's services. Last year, TCS's Colombia business grew 50 percent and Gonzalez expects 2010's growth rate will be similar.

This struck me as a great example of south-south trade— i.e., trade within the developing world. Here are Colombian workers, providing services to local and multinational companies, working collaboratively with colleagues in Montevideo; Uruguay; and Chennai, India; and reporting to a manager in Buenos Aires, Argentina, who in turn makes a monthly trek to India to meet with his superiors. In Colombia, business is conducted entirely in Spanish. But Tata's internal language is English—heavily accented, jargon-filled, acronym-based English.

What's driving the growth at TCS? "ADM." (Application, development, and maintenance). TCS specializes in installing complex software systems in large institutions and then making sure they function properly. In Colombia, TCS helps companies such as Dell and Oracle service their clients. It also takes on big projects for large institutions. "As of today we have presence in the banking industry, telecommunications, airlines, and in government," Rodriguez said. For the ministry of finance, it's instituting a system to handle the national budget. For Bancolombia, it's developing software tools to manage loans. "We provide updates, and maintain functionality," he said. Other large clients include Banco de Occident and the airline Avianca.

Gonzales waxed (not quite poetic) about several other acronyms. BPO (business process outsourcing) is a growing sector. Tata's GDS (global delivery system) model allows it to service clients around the world and share knowledge. The Colombia office has about 20 employees from India and about 15 from Uruguay, the site of one of Tata's GDCs (global delivery centers). "We provide services to Colombia customers with around 700 resources—300 in Colombia and about 400 elsewhere, like Montevideo and Chennai," he said. And perhaps this was the most telling sign that things have changed for a fortunate part of the population here. (Colombia, with GDP per capita of about $5,600, is still a poor country). It was refreshing to hear talk of "resources" and realize he was actually talking about "people"—not natural gas, or precious metals, or agricultural commodities. Make no mistake. Colombia's growth continues to be driven in large part by the old north-south trade—pulling metals and hydrocarbons out of the earth and shipping them to more advanced economies and relying on cheap labor to produce shoes, garments, and other goods. But TCS is an early sign that Colombia is developing an industry built around human resources. There's got to be acronym for that.