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August 18, 2005 


 Q&A: Daitan Labs Founder James Bergamini on Brazilian Workers 8/2/2005
The mission of Going Global, which appears on ePrairie on most Tuesdays, is to educate and inform Midwest technology companies on what local technology companies are doing internationally so other firms can learn from the successes of like-minded peers.

CHICAGO Ė Prior to establishing Daitan Labs, James Bergamini was employed for 20 years at Lucent Technologies.

At Lucent, he held various executive positions including vice president of international sales and marketing for voice messaging systems and convergence solutions in Latin America. While heading Lucentís Central America and Latin America switching solutions group, he served as president of two telecom companies in Brazil called Batik and Zetax Tecnologia.

Prior to living in Brazil, he served as director of Lucentís switching joint ventures in India, Taiwan and Indonesia. He also lived in Japan and managed a number of wireless and wireline projects. In part three of a three-part Q&A, Bergamini sat down with international expert Michael Muth to discuss the details of Brazilian workers.

Michael Muth: How can you be productive if you work close to the same hours per day?
James Bergamini: If youíre in the business of pumping out discrete units (like widgets), time-zone disparities donít present a problem. In software development, itís not so easy and typically doesnít work as efficiently as people think.

If there are any ambiguities in requirements or specifications, you need to manage this in real time, vet through the details and continue your coding. If you donít get answers quickly, you have down time and a major loss of productivity.

For instance, right now itís 3 p.m. in Brazil. If any Brazilian developer needs to resolve anything with their U.S. counterpart, they just call. Itís 1 p.m. CDT and someone will answer the phone.

R&D centers on the other side of the clock just promote endless orchestration of conference calls beginning at 11 p.m. and lasting throughout the night. Our U.S.-based customers communicate with us in real time. Itís clean and it works well. We are simply an extension to their team.

When most of our U.S. customers are having their first cup of coffee in the morning, Brazil is only on their second cup.

MM commentary: Iíve often thought the advantages of multiplying shifts for software development were overblown.

MM: How can you qualify your technical workforce there?
JB: My partner is born and raised there and has been founding companies for the last 20 years. We have access to many people there from running companies. They are knocking on our door.

We have a headhunter who weíre considering giving 1 percent equity with a database of 47,000 people. When we share it with some of our customers, they want to use it as well. We go through a rigorous interviewing process along with people weíve known over the years.

MM: Yes, Brazil graduates many people with doctorates (in what?), but how do we measure the quality of those graduates?
JB: Their degrees are in electronic engineering, aerospace and genetics. I suppose we donít know the quality.

What type of metrics can you use? You really canít. You can say the same comparing doctorates in the U.S. Itís all about intellect, leadership and being entrepreneurial. Itís the leadership team, too. It doesnít make you a more intellectual society. Theyíre being coached by the best and brightest.

MM commentary: Having lived and worked in Germany for a couple years, there were many more people with doctorates in management positions. People with doctorates are much more respected in business there. However, given the numbers, I do wonder if their standards were as stringent as ours.

MM: How are Brazilian engineers compensated?
JB: A good Brazilian engineer with a couple years experience will make 40 percent of what a U.S. engineer makes. They will live rather well on that, too. Obviously depending on the scope of work, they will narrow that gap. For every one engineer in the U.S., you can get 2.5 engineers in Brazil.

We arenít a time and materials shop. They are on our payroll with a monthly salary for 13 months a year (they get an extra monthís pay as bonus). When a project manager does an outstanding job, we extend a small equity stake. Weíre trying to bring in the best breed people and compensate them well. We can take that to our customers in the U.S. and Europe.

MM commentary: Given exchange rate changes, you used to be able to get three Brazilians for one American.

MM: Where are your customers? The U.S.? Europe? Asia? Latin America?
JB: We are focused on the U.S. and also Europe and EMEA (Europe, the Middle East and Africa). R&D pipelines have been starved. Innovation has been starved. Companies are apprehensive to bring people back on full time.

They are primarily vendors in wireline, wireless, VoIP, cable and optical. Tier one for us is billion-dollar companies like Lucent and Tellabs. Tier two is $200 million to $1 billion companies. Small start-ups with revenues of $10 million to $100 million are growing quickly. They need bench strength. They are target customers as well.

MM: While the Real (the Brazilian currency) has been stable lately, how can you forecast that it will remain so?
JB: Actually, the Real has gained strength lately. We canít control foreign exchange. I look at it every day. In the last year, the Real has gained value against the U.S. dollar by 15 percent. That goes directly to our bottom line. We will start hedging.

However, it has been stable over the last 10 years. There have been some blips. All of our contracts are in U.S. dollars (even in Europe). We bear the risk of currency fluctuation. I live this daily.

MM commentary: Managing foreign exchange exposures can be risky. While the Real has been historically stable compared to the 1960s and 1970s, itís still not as stable as the Euro.

MM: Have you had to ration your electricity lately?
JB: Iíve never experienced that. Jones Lang LaSalle looked at outsourcing from an infrastructure point of view and Brazil did very well. When I lived in India, I experienced power outages frequently. Iíve personally never experienced that in Brazil. Itís not an issue in Campinas.

MM commentary: Brazil derives much of its electricity from hydropower, so when they have a drought, power generation suffers.

MM: How did Lucent manage its international sales force?
JB: In countries where the addressable markets were significant or growth was forecast, they deployed local teams and provided expatriate support from the U.S. to cross train. They were very effective at this.

MM: How was selling in Latin America different from selling in the U.S.?
JB: Above and beyond culture and language, I have to say being more patient. You canít expect to close deals as quickly. Sales cycles are longer. You have to work relationships. You attend weddings and become part of a family. It really is different. Theyíre just as hard on pricing. If youíre an American and selling to other cultures, itís that much more difficult to prove yourself.

Sometimes I wish I would have started my career supporting a Japanese customer. They are the most fastidious country in the world. They demand excellence. It makes you a better businessperson. Itís very rigorous. We Americans may be too impatient. Itís a long and drawn-out process. Itís just a different mindset.

MM commentary: All of this is true in much more than just Latin America.

MM: How would you rate the international components of Whartonís offerings?
JB: Top notch. Most of the coursework I took was in finance.

The student atmosphere was a melting pot with Asians, Europeans and some Latin Americans. It wasnít international courses. It was just nuts and bolts management stuff that was part of a management program. I took a couple courses at Thunderbird. Thatís clearly an international school. Itís built on that. Their DNA is international.

MM commentary: Wharton has a fine international program. Itís just that Thunderbirdís program is 10 times bigger.

MM: What languages do you speak?
JB: I only speak English fluently. I can manage Portuguese but would rather not. I would never make a formal presentation in anything other than my native tongue. Iíve tried it. It wasnít pretty. It has gotten me into trouble occasionally.

MM: How much has this helped or hurt you?
JB: Certainly being multi-lingual would be a great plus. However, not being fluent in other languages forces the use of translators.

In negotiations with customers, this keeps it simple. It has helped. However, it can be a double-edged sword. Not speaking a customerís native tongue can give the appearance of being too U.S.-centric. That can be penalizing especially in Latin America and some Asian Countries.

MM commentary: I think he may be selling himself a bit short here. He seems like a true internationalist and hence is naturally modest. I would bet heís more capable than he says.

MM: How long have you lived in Brazil, Japan and India?
JB: I lived in Brazil for 25 months, almost three years in Japan and two years in India. Though I havenít been to places like Myanmar and Cambodia, I have visited all of Asia. Back in 1999, I received a letter from a major U.S. airline stating that I was the No. 2 guy with respect to cumulative miles flown.

Iím not proud of this. Though I would have preferred to spend more time with my family, it is what it is and it has been very enjoyable experiencing different cultures and different business styles. Iím on my third passport and some of them have extensions in them.

MM: How evolved are each of these markets in telecom?
JB: They all demand excellence. People who run these networks are smart and very hard-working people. Whatís different is the pace of how we work. Itís all about the end-user desires in their telecom systems.

In India, they have 2 percent penetration. While wireless is getting more penetration, itís still not at the sweet spot in terms of price. Value for the money is demanded. At the end of the day, itís the users who determine and vendors need to listen to them.

MM: How is the business culture different in each country?
JB: In the U.S., weíve run our businesses on a quarterly basis and thatís gotten many companies into trouble. In Japan, they actually have 100-year business plans. When youíve been around thousands of years, thatís their thinking. Theyíre looking downstream. Weíre driven by earnings per share on Wall Street. Thatís not so true everywhere else.

The social climate and culture is a lot warmer. Here we work 20-hour days and are consumed with work. Working 12 hours days is acceptable here. In Europe, they lock up on time and have more balance among business and family.

MM commentary: The Germans have five-year plans and they actually stick to them. I find it difficult to imagine how one would manage a 100-year plan.

Michael Muth is managing director of GATA, an international business development consultancy that helps technology companies build international partnerships. He can be reached at mike@intlalliances.com.
Click here for Muthís full biography.

Previous Columns:
Q&A: Daitan Labs Founder James Bergamini on Brazilís Silicon Valley (7/26/2005)
Q&A: Daitan Labs Founder James Bergamini on Next-Generation Telecom (7/19/2005)
Q&A: Op2mize Founder Geoffrey Kasselman on Asian Advancement (6/28/2005)
Q&A: Op2mize Founder Geoffrey Kasselman on Findings From Asia (6/14/2005)
Q&A: Op2mize Founder Geoffrey Kasselman on Analog, Smart Buildings (6/7/2005)
Q&A: Manpower CEO Jeffrey Joerres on Changing European Regulations (5/31/2005)
Q&A: Manpower CEO Jeffrey Joerres on Comparison Between U.S., France (5/17/2005)
Q&A: Federal Reserve Bankís William Testa on Cautionary, Hopeful Prospects (5/3/2005)
Q&A: Federal Reserve Bankís William Testa on Chicago Business (4/26/2005)
Q&A: Federal Reserve Bankís William Testa on Headquarters, Exports (4/19/2005)
Q&A: Lisle Technology Partners CEO Adarsh Arora on Keys to Outsourcing (4/5/2005)
Q&A: Lisle Technology Partners CEO Adarsh Arora on Outsourcing in India (3/22/2005)
Q&A: Lisle Technology Partners CEO Adarsh Arora on Offshore Outsourcing (3/15/2005)
Q&A: CECís David Weinstein, Kapil Chaudhary on International Experience (3/1/2005)
Q&A: CECís David Weinstein, Kapil Chaudhary on Internationalization (2/22/2005)
Q&A: Brian Briggs of Acclaro on Whether to Outsource Localization (2/8/2005)
Q&A: Brian Briggs of Acclaro on the Complexities of Localization (2/1/2005)
Q&A: Brian Briggs of Acclaro on International Localization Services (1/25/2005)
Q&A: RPXís Robert Okabe, IECís John Janowiak on Global Events (1/11/2005)
Q&As: FastRootís Terry Howerton, Doug Cogswell of ADVIZOR Solutions (1/4/2005)
Q&A: Opportunity Internationalís John Kamperschroer on Partnerships (12/21/2004)
Q&A: Opportunity Internationalís John Kamperschroer on Technology (12/14/2004)
Q&A: Opportunity Internationalís John Kamperschroer on Innovative Financing (12/7/2004)
Q&A: IEC Senior Director John Janowiak on Trade Show Realities (11/16/2004)
Q&A: International Engineering Consortium Senior Director John Janowiak (11/9/2004)
Q&A: Founder John Lee of Chicagoís Hostway on Web Site Localization (11/2/2004)
Q&A: Founder John Lee of Chicagoís Hostway on Growing Globally (10/26/2004)
International M.B.A. Guide to Moore School of Business, Thunderbird (10/12/2004)
Your International M.B.A. Guide to Northwestern, Loyola University (10/5/2004)
Entrepreneurís Guide to International M.B.A. Programs in Chicago (9/28/2004)
Q&A: Prairie Angels Founder Bob Okabe on Diction, International Cities (9/7/2004)
Q&A: Prairie Angels Founder Bob Okabe on International Adaptation (9/1/2004)
Q&A: Prairie Angels Founder Bob Okabe on Managing U.S. Subsidiaries (8/24/2004)
Q&A: Origin Ventures Founder Steven Miller on Investments, Angels (8/17/2004)
Q&A: Origin Ventures Founder Steven Miller on the Canadian Way (8/9/2004)
Q&A: CPCP Founder David Baeckelandt on Multilingual Importance, Mentoring (8/3/2004)
Q&A: CPCP Founder David Baeckelandt on Japanese Disclosure, Due Diligence (7/27/2004)
Q&A: Chicago Pacific Capital Founder David Baeckelandt on Overseas Funding (7/20/2004)
Q&A: ADVIZOR Solutions CEO Doug Cogswell on the Art of Partnering (7/13/2004)
Q&A: ADVIZOR Solutions CEO Doug Cogswell on BP, AstraZeneca Wins (7/6/2004)
Q&A: ADVIZOR Solutions CEO Doug Cogswell on Global Software (6/29/2004)
Q&A: CEO Terry Howerton on Why Chicago, Ukraine Made FastRoot (6/22/2004)
Q&A: FastRoot CEO Terry Howerton on Blended Chicago Approach (6/15/2004)

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