A peek into the world of shared services

Friday, November 25, 2011

Companies worldwide are always looking to save on costs, realize synergies and focus on the core business, and Latin American firms are no exception, and outsourcing companies have capitalized on this trend. Within this niche, shared services centers have also come into play with a unique view on customers' IT needs.

BNamericas spoke to Jonathán Sánchez, deputy director of implementation and technology at Mexican shared services center Conectum, to find out more about the company's needs and what it sees as the upcoming IT trends.

BNamericas: What is the link between Conectum and Grupo Posadas?

Sánchez: Conectum is a shared services center. It was created eight years ago by Grupo Posadas, which chose the shared services center to centralize some back office functions. I've been with the project since its founding, even choosing the location in Mexico. Today, we cover all of the Posadas business, processing back office transactions. We're based in Oracle e-Business Suite.

BNamericas: Do you work exclusively with Grupo Posadas, or do you offer other services?

Sánchez: We worked exclusively with Grupo Posadas for six years, but we expanded and now offer services to other companies. Today we have a big customer [outside of the Posadas group] called Corporación Mexicana de Restaurantes. We also process all of their back office transactions.

BNamericas: You mentioned Oracle. What's your relationship with them?

Sánchez: As the basis of our operations, we use Oracle's ERP in e-Business Suite. We also use Oracle's hosting services; we're hosted on demand at their data center. Those are basically the two areas in which we have a relationship with Oracle.

BNamericas: Oracle has been hyping up Exadata hardware, Exalogic middleware and Exalytics BI. Are you headed in that direction? Is it something that interests you?

Sánchez: Yes, but it's not really totally Conectum's decision. Since we're hosted in On-Demand, they're constantly evaluating the hardware capability for us. So when it becomes necessary to substitute the servers that we have for Exadata, they'll let us know and we can develop it together in a work plan. That's part of the hosting deal with Oracle on demand.

BNamericas: What would you say the IT challenges are for Grupo Posadas?

Sánchez: I see two significant challenges. The first is that Grupo Posadas used to be a hotel group. We launched eight years ago and it [Conectum] was all structured for the hotel segment. Our implementation, the definition of the accounting catalogue and of the structure - it was all in thinking about hotels. Eight years later, the business isn't 100% hotel. About 35-40% of Posadas' income no longer comes from the hospitality industry - they're other business like loyalty programs, call center with inbound and outbound calls, the services center, real estate companies, publicity, etc. It's really been diversified.

So the IT challenge is to provide services to not just hotels, but to a wide variety of businesses.

The second challenge is to grow - both organically in Posadas incorporating more hotels, other clients incorporating more restaurants, and inorganically. This obliges us to be better able to respond to specific requests.

BNamericas: How are you rising up to these challenges?

Sánchez: We have two strategies, the first is that we're looking for alternatives in the new version of e-Business Suite, version 12. We're very interested in that… and we're looking to take advantage of the new version that has new functions for centralized operations, which for us with a shared services center would bring lots of benefits. The software strategy is in that direction.

The second strategy has to do with on demand [services] for our application to continue responding and even improve response times for the whole range of clients that we have throughout Mexico.

BNamericas: Are you looking at cloud services?

Sánchez: On demand is leading us to virtualization, and with that we're going into the private cloud. In fact we're now releasing production and defining the work plan. Our productive processes have already been converted [to virtualization]… and we expect to gain in performance and agility in the maintenance process.

BNamericas: What are you doing with respect to handling big data?

Sánchez: Today we have millions of transactions stored. The authorities in Mexico ask us to keep accounting and fiscal data information for 10 years. So we have eight years of data [over the life of Conectum] of all the companies that we work with. So we see some related projects here.

First, we want to migrate, and then we'll probably want a data warehouse solution, probably combined with a solution to manage the data. This management is getting to be critical. We also have some business intelligence solutions, and we're running the BI and transactions at the same time. That's not optimum.

But we're a bit conservative when it comes to solutions deployment, in order to ensure results. First, we want to migrate, and then we want a solution that will allow us to free up our data and better manage it.

BNamericas: If you had to choose a couple of IT areas that you feel will be highly relevant in the next year or two, what would they be?

Sánchez: We see all the tools for the management of big data [as getting big], but always linked into business intelligence. It's been a hot topic for the last two years, so we really believe it is going to evolve and we want to get on board - not just in the design but also in the deployment. We've seen some developments for both iOS systems and Android, with even BI for deployment. That's important for us.

The other has to do with cloud computing and virtualization. We're not just talking about server virtualization, which is what Oracle helps us with, but in the whole shared services center that has 320 employees and we're interested in desktop virtualization.

BNamericas: What is the annual amount that Grupo Posadas budgets for technology via Conectum?

Sánchez: Conectum functions independently, and we charge both our internal and external clients. The budget that Conectum has is about US$1mn-1.2mn, but according to the project, we can ask for additional capital.

About the company

Conectum runs a shared services center in Mexico, offering outsourcing for companies' financial and administrative processes. It is part of Mexican Grupo Posadas, founded in 1970 by Gastón Azcárraga - whose family controls media giant Televisa - and which focuses mostly on the hotel segment. With hotels such as FiestaAmericana, Aqua, Cesar Park and Cesar Business, Posadas receives nearly 3mn guests a year.