After 30% Growth In 2014, Digitex Finds Strong Growth Prospects In Colombia’s Insurance And Finance Sectors
Iberian company Digitex has been experiencing tremendous growth of late, using its global footprint to find success beyond its Iberian home. In 2014 alone, the company realized 30% revenue growth in Colombia alone, providing a mix of technology and services to corporate customers. Digitex has expanded beyond its Colombian headquarters bastion of Bogotá, becoming the largest private employer in Manizales and Ibague, according to statistics provided by the company.
Digitex has over 15,000 employees, and a presence in Spain, Mexico, El Salvador, Guatemala, Chile, Peru, and Colombia. In addition to its financial and insurance sector customers, it also serves firms in the telecom and energy field.
Finance Colombia’s Loren Moss recently sat down with the head of Digitex’s Colombia operations, Salvador Vega, to learn exactly what is behind the company’s rapid growth in Colombia, and what may yet be in store.
Finance Colombia: How long have you been operating here in Colombia?
Salvador Vega:Digitex in Colombia is part of a multinational company with 26 years of experience, 15.000 employees and revenues of around 160 million Euros. Colombia is the biggest subsidiary in terms of employees. From the 15,000 employees, 6,500 are here in Colombia. Additionally, besides Spain and Colombia, we are in Chile, Peru, Mexico, Guatemala and El Salvador. In Colombia we have around 1,000 here in Bogotá, in the free trade zone. We are also in Ibagué with 1,500 employees, in Manizales where we have the highest concentration, around 1,500 employees. There we have 7 operational centers; one in Ibagué, and here in Bogotá we have another one. We have a presence in Cali and Medellín, where we also have a commercial office, focused on investments from a technological point of view, with working with hospitals and universities.
Digitex is a company that analyzes processes for big companies; analyzing the needs they have, their supply chain, and then offers them an optimization based on implementing better technology, consultancy for optimizing processes, and everything focused on delivering their customer experience. That’s more or less the strategy of our company. Here in Colombia we focus on several sectors. One of them is telecommunications, where we provide services for them; basically there we provide technical support and support via telephone. And now we are growing in the BPO sector, in health and insurance. Our objective is to take one process from the client, hopefully the whole chain and not only one isolated process, make use of our internal capacity or our integration with our third-parties to be able to provide a solution, from the technological and customer experience point of view, so that it results in their cost optimization and a better positioning in the market.
In Manizales we are the largest employer, in Ibagué as well. We have been here since 2005 when we started with 50 employees. We arrived here through Telefónica in Spain, and in Colombia we have found highly qualified people, and particularly a vocation towards customer service, that we don’t find in other countries. In Manizales, we started with 50 people and we saw that the quality of the service was very good, and now we are around 1,500. We are now serving two or three clients from the insurance and health sectors, and our portfolio of products has a good penetration in the market and our plan is to reach new clients with that portfolio of service here.
Finance Colombia: It’s interesting because in the insurance sector here in Colombia is enjoying a positive outlook by the ratings companies. Which changes have you seen in that sector that is creating an opportunity?
Salvador Vega: The growth projection for insurance companies in Colombia is really high. What we see is that their internal processes are designed for the current market. So the first limitation they encounter when they want to grow is that the technology they use is already limited, or needs investment to make it grow, and if they go to grow it, they do it not as a company devoted to technology. In some cases they don’t select the optimal technology, or they select one that doesn’t integrate well with what they already have. It is a challenge which is outside of the core of insurance companies, and which we believe, from a technological point of view, we can help with.
In addition to helping them with their technological infrastructure when they want to grow, well, one of their core activities is selling, and we also have experience in the sales cycle of insurance products, collections management and payments. So helping those companies with technology so that they can grow, and additionally providing them with the people to expand in the marketplace, it’s a strong offer, right?
But then there is more: not only with insurance companies but in the banking sector, the regulations related to document management are something that many companies are not prepared for. Document archiving and management is not the core of their businesses, I believe distracts them a lot from their activity and it one of the processes in which we have a great capacity and can process high volumes efficiently. I think there are companies growing in this sector, and when they grow, well, they also become less flexible. When we started to analyze the processes in some companies, we have seen that they involve a number of very high validation processes, validations are not systematic nor automatic; in some cases signatures from a great deal of people are required, and processes are slow, right?
So when you start to use applications to accelerate those processes, the reviews and steps in the workflows, you begin to see the deficiencies in the existing methods. That’s where we see plenty of opportunities. I believe the insurance, health and banking sectors provide us with a huge opportunity thanks to all those reasons. There are different ways to access that market, whether a customer wants our complete package, only want the document management, or only the sales offering, but we want to understand the need and find out where we can help the customer so that they have a more useful engagement.
Finance Colombia: That’s interesting because up until now, I thought of Digitex more in the context of call centers. But now I see you cover all the aspects of BPO, from IT to workflows and document management. In insurance, it is a big challenge when some companies are well-established and have been in the market for years, say, “we have always done things this way.” But in the long run, they perhaps could do things in a less expensive way; they could provide better customer service. Compliance becomes more efficient because you can always know where a document is and say “look, I can do a cloud backup of the entire data center,” but if I have a paper document and it is lost, well, it’s lost. It is also interesting, but I imagine there are some challenges due to laws, because the laws of some countries, departments or states do not change so fast. There are cases in which paper documents are mandated. When I arrived in Bogotá, I asked, “Why do these offices have so much paper?” And people explained to me, “Because the law says you have to.” I asked: Why don’t you scan it? And I was told “No, because the law has not changed.” How can you help companies facing that challenge?
Salvador Vega: For us, those sectors regulated by law is something beneficial because it tells the companies that they have to get organized, but the basis for us offering the service is not because the law requires it. We go to companies where they indeed have stacks of paper, where the time it takes to look for a document is not optimal. There are regulatory issues there that have nothing to do with document management, it may be about delivering documents due to other legal aspects, and that often takes some time because those documents are not always easy to find. So we sell our solution from the point of view, not of a regulation to comply with but the file in the end requires an organization, a structure, requires space that sometimes is not available. In the case of some documents’ lifespan, you have to keep them at least 5 years, some of them up to 15 years—well, imagine companies with a high volume of employees keeping records for five to fifteen years
Finance Colombia: A company like Digitex is not small; it is seven countries, right? But speaking about those competing markets, in insurance, health and finance, banking, how can you win and grow so much, facing global giants in the BPO space?
Salvador Vega: Well, I always say Digitex has the perfect size, because it is not so small as other competitors who could have financial difficulties or lack solvency to face huge growth, but it’s not so big so as to lose one of our characteristics, namely, flexibility. In the end, big companies are slower, more bureaucratic. It happens to our clients: our client’s development departments are slow because they are big and have queues of work. And we are sufficiently big so as to have the economic capacity to handle big projects, but we are small enough not to lose flexibility. I believe that is what allows us to compete. There are big multinationals who come with other big companies, who offer solutions with state-of-the-art technology too, who have a super robust commercial team, but are not as flexible, so we can come with a product, one in the market, already tested, which could offer similar functionality, a lower cost, and besides, we are more flexible. So that’s our entry into the big companies.
Finance Colombia: You have implemented an strategy of locating operations, not just in the largest, top tier cities in Colombia, but you chose cities like Ibagué and Manizales, which are not exactly small towns, but are not always the first cities that come to mind when people think about doing business in Colombia. What was the strategy behind those choices, and how did you get to that decision?
Salvador Vega: Quite simple, you see. You said a while ago that you thought of Digitex as more of a contact center operator, and it’s no mistake, Digitex was born as a contact center. It evolved. Digitex realizes that the basic contact center is a commodity offered by many competitors, and so it has to be differentiated by different solutions. The fact that Digitex goes for those cities, is because that bet was placed before Digitex arrived to Colombia. So Digitex arrived to Colombia with some contracts, closed ones, which did not have to be in big cities to achieve the objectives; they were already set. Those big contracts were originally from the contact center. And if you want to provide good service you have to be located in a place where you could have the qualified staff, where you are unaffected by employees’ rotation without having too much demand [outstripping the labor supply], and where there is moreover, a quality in the service, a human quality, which is always perceived to be better in these smaller cities. Manizales and Ibagué, also offered incentives to promote employment, and those were the main reasons why we went to those locations.
Now, in those sectors which are much more specialized, we are growing here in Bogotá. In the end, if you need infirmary personnel, doctors, well, in Manizales and Ibagué you could find some, but then you don’t have that much expansion capacity. If we look at our operations in Bogotá, Cali, Medellín; in Cali and Medellín, we are focusing on technology. We have had a great reception with hospitals and universities, and are quite focused in those areas. Here in Bogotá we do a lot of BPO. In Manizales and Ibagué we have contact centers, a bit of BPO, but not as much.
Finance Colombia: How long have you been here in Bogotá?
Salvador Vega: I have been with the company 10 years; you can tell I am Spanish, with an accent that one does not lose! I left Spain after four years so I’ve been 6 years abroad). Because of the situation in Spain, the company’s main client assessed the strategy of de-localizing, because there are emerging countries where the costs are lower, the cost of manpower, while the demonstrated quality of service was very good. In that process of expansion, I started out as an employee and eventually became a director, I was living in Ibagué, Manizales, then I was living in Peru also, and in Bogotá, I’ve been here three years.
Finance Colombia: The best Spanish food in Bogotá?
Salvador Vega: Well, there is a place here in Usaquén called La Puerta de Alcalá.
Finance Colombia: Ah, you have good taste!
Salvador Vega: It’s my favorite one. Not bad if you ask me.
Finance Colombia: Thank you, I love food from Spain.