San José, Costa Rica, since 1956

Latin America key to IBM’s growth

Ken Jennings and Brad Rutter are the two most successful players in the history of the game-show Jeopardy! Each dominated the famous quiz show for weeks at a time, won millions of dollars and earned reputations as the two best Jeopardy players ever.

On Feb.16, an IBM computer beat them both.

Watson, a computer system created by Armonk, New York-based computer and consulting firm IBM, was developed to answer questions. Different from an Internet search engine that provides links to sites pertaining to a certain inquiry, Watson was designed to provide answers to any question posed. 

Watson is the latest great creation of IBM. During 100 years of operation, IBM has developed innovative technologies such as the bar code, the floppy disk, the automated teller machine (ATM), and the first portable personal computer.  

On June 16, IBM turned 100. Two weeks later, one of its first moves to kick-off the company’s second century and centennial celebration was the announcement of a $300 million investment in Costa Rica.

Recently, Carl Ingersoll, general manager of IBM Costa Rica spoke to The Tico Times. Excerpts follow:

IBM has been in Costa Rica for seven years. What are some of the services that IBM offers and what is the company’s objective here?

We started with an acquisition of Proctor & Gamble over the first couple of years. Over the next three years, we grew probably six or seven human resource accounts and started with about 250 employees. We went quickly to about 700 or 800. We then started taking in more work from IBM internal, which means IBM outsourcing to IBM for the purpose of lowering costs. …

In 2009, we signed our first customer relationship management (CRM) deal. The work that I’ve talked about so far, for example when I talked about the deal with P&G, people would call in and say, ‘Hey, my paycheck is incorrect,’ or that they needed help with benefits, and we were working directly with the employees of the company. To contrast that with CRM clients, it’s the consumers of that product or service the company sells that calls in. …

Now, we’ve recently announced a large investment in 2011 with global technology services and will have a new center that is opening up.

As for the investment, which was estimated at $300 million, what does that mean for the next five years for IBM in Costa Rica, and what are the future plans for the company here?

One step for the company will be to consolidate the IBM offices here, which should be during the fourth quarter of this year. We will move into one IBM campus.

The new part of IBM is all about IT services and IT outsourcing. What that means is that clients will come to us and say that they want us to run their IT departments. Maybe they are an insurance company or a bank or retailer and IT isn’t their strong suit. So we take the IT part of their company and run it for them. … Some clients will actually reach an agreement with IBM where the client gives IBM an entire organization, people, service, software, and we run it to take costs out and increase productivity and efficiency. There is a whole range of IT service and outsourcing that we will do here.

As for the advanced level IT professionals you are looking for, is there a large pool to pull from in Costa Rica?

That is a key question IBM has been asking since day one. We have asked, can we really make this work here in Costa Rica? A thousand is a big number and to be honest, we’d like to go beyond 1,000 if we can. The universities are definitely putting out the raw material. If you look at the number of graduates out of the technical universities, there is no concern with the amount of people graduating, though the concern is that we are looking for the higher-level skills.

IBM has plans to pair with the national universities to create a higher order curriculum. So, a university might have a relational database course, and IBM might come in to make it more specific and advanced. It makes the students graduating that much more prepared to take a job at IBM or other partners. We really plan to build that plan with universities and not just take a computer science major but somebody that has had some actual training and that understands what they need to know to work for the IBM Corporation. Universities are pretty excited about it.  

There was such a large rollout for the IBM announcement in June, and foreign direct investment is such a large economic pillar that continues to grow in this country. What is the attraction to Costa Rica and how was it decided to invest here?

The process of selection is extraordinarily extensive. The process to make this decision takes probably more than 15 months where we look at a ton of factors, such as government involvement, taxes, incentives, free-trade zones, safety, security, and on and on. There are a number of things that go into the equation to ultimately get to a decision to make a huge investment like this. Latin America in general, if you look at our 2015 road map presented by our CEO, … one of our growth markets includes Latin America. So we knew that we wanted to make an investment in Latin America and we already have a huge presence here in countries like Argentina, Brazil, and Chile, and we decided to make the next biggest investment here. There are a number of important competitive advantages here and a lot of clients that come here to work with us are U.S. businesses. They want near-shore and are only three to four hours from this operation if they need to send people here. That is an advantage that Costa Rica has over other locations.

IBM is celebrating its centennial this year. What are some of the company’s biggest accomplishments in 100 years?

Well, there is Watson. About 10 years ago, IBM built the Deep Blue computer that beat the world’s leading chess champion, Gary Kasparov. But, if you think about it, chess is a pretty mathematical game. You can conceive that it could be programmed to master the game.

The show Jeopardy! is completely different. It is unstructured and ambiguous and quirky. The answer is provided and you have to come up with the question. Some of the subjects are humorous and creative. The information is varied and random. It is not a Web search, it is all about how a computer can be programmed to take ambiguous, seemingly unrelated and fragmented information and come back with a reasonable response to the question. We’d been developing a program to provide the answers for three to four years. Then, when the program was ready, the goal was to play the top two Jeopardy! of all-time on national television. When they played, Watson won. …

The applications of Watson can be used to provide the answers to questions at all of the global IBM centers. It’s not commercial yet, but that could be something else that IBM offers in the future.

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