New technologies like big data, cloud computing and social media are transforming business in Latin America. Companies are using them to boost revenues, trim costs and gain more customers.
In healthcare, a call center agent can sometimes strain to decipher an emergency. A patient may not know how serious his pains may be.
Gustavo Aguirre, the CIO at private health insurer Grupo Osde in Argentina, is implementing technology to ease this process. An agent taking a patient’s call will still ask questions and input what is said. Then a rules engine – software capable of inferring logical consequences from a set of data – will process the information and determine how quickly a doctor should be dispatched on a house call, putting that case ahead of others if urgent. “This improves the quality of our services,” Aguirre says. “It reduces errors.”
Rules engines are an example of how new technologies like big data, cloud computing, mobile and social media are transforming business in Latin America – and around the world. Companies are using them to improve their capabilities for marketing and operations, and to boost revenue, trim costs and gain more customers.
These technologies are making noise in Latin America, yet wide implementation is still “a couple years away,” says Rodrigo Slelatt, who follows these trends at A.T. Kearney, a New York-based management consulting firm.
Most companies are still focused on enterprise resource planning, he says. They are integrating all the parts of their organizations – accounts payable, customer databases, human resources, order-tracking systems and so forth – into a network that can be accessed and updated by employees all the time.
Nevertheless, steps are being taken, the first being in cloud computing, or renting computing capacity, and applications over the Internet.
The benefits are clear. For one thing, it costs 10 times less than acquiring servers and software licenses, says Slelatt.
Another advantage is availability. “Cloud computing is a great way to provide people more immediate access to vital information such as a sales rep who needs information right away about a customer’s contract or deal status,” says Joe Ruck, CEO of Menlo Park, California-based BoardVantage, which provides secure online platforms for leadership communication.
Traditionally, firms order a server for more capacity and then the software for new applications, a process that can take six months to a year. “Cloud has cut these cycles,” says Octavio Osorio, the vice president for Latin America at EMC, a U.S.-based information management company.
Providers of cloud-computing services like Amazon, Google and Microsoft handle the hardware and users pay a subscription. What took months, now takes hours. “Cloud technology gives you greater velocity to implement your business strategy,” says Osorio.
This is putting companies on their toes. Smaller companies can now purchase the same technology once only affordable by larger firms, he says.
At Grupo Osde, Aguirre says demand is rising within the company for flexible solutions capable of processing information in real time so managers and employees can make quicker and more precise decisions.
To do this, he has had to change his way of thinking. “To design flexible solutions, you have to think in abstract, to think of solutions that are adaptable to future demands,” he says. “If the business has to adapt, my processes and solutions have to adapt as well.”
Nor can computer systems just process operations anymore. “They have to have capacity to make decisions,” Aguirre says. “They have to be able to review different scenarios and choose one which is the best.”
What’s the payback?
CIOs may be clever at technology, but now they also have to become experts in their company’s business and learn how to boost returns with computing power, says Gerardo Gramajo, who runs SkyOnline’s data center in Buenos Aires. “Technology must resolve problems that allow a company to earn more money,” he says. “Technology for technology’s sake is not worth it.”
Nevoa Networks helps find such solutions. TecBan, which operates ATMs and transports money in Brazil, turned to the Recife-based data management company to find storage for backup camera footage from its armored trucks. Nevoa used virtualization to pool idle disk space on 200 desktop computers so it can be managed centrally. “This provides security without additional costs on infrastructure,” says Hunter Hagewood, a co-founder of Nevoa.
In Buenos Aires, Mariano Suárez Battan says cloud computing has sped up the development of Mural.ly, a startup that allows users to share projects in real time on a virtual whiteboard. “We use java script in the cloud, which makes everything very nimble,” says the CEO. “Instead of doing a release every three months, we can do one every 15 minutes.” Find a bug? No problem. “We fix it and it’s online right away.”
Mobile is another movement. David Eads, a mobile commerce veteran and founder of U.S.-based consulting firm Mobile Strategy Partners, describes the global push into mobile as an arms race.
Latin America is no exception. In February, Itaú Unibanco, Brazil’s second-biggest bank, launched a service that allows customers to wave their smartphones close to a payment terminal to buy everything from a coffee to a pair of jeans.
“All the banks have mobile solutions in Brazil, and they are not sitting still,” Eads says. They are finding ways to arm branch employees with mobile capabilities so they can help investment bankers tap the wealth groups, he says.
Retailers also are experimenting. First came the use of mobile to speed up shelf stocking and reduce friction in the supply chain. Now Eads says they’re looking at mixing mobile payments with coupons and loyalty programs, and next could come “line busting,” or allowing shoppers to complete purchases on their mobile phone without waiting to get it rung up.
In the office, the falling cost of Android smartphones is spreading their use and the creation of applications so that airline mechanics can carry repair manuals on them. District managers can check stocks at stores while on the fly; oil workers can file trouble tickets right from the well. This may be “cutting edge,” Eads admits. “But it’s not risky; it’s good business.”
Social media offers similar opportunities. It expands the number of channels for firms to reach customers and brings with it a wealth of data, says Michael Widjaja, who consults companies on technology in Latin America as a managing director of Accenture. “You can know more about the customer through social media, so you can offer a more specific service,” he says.
Social media is possible thanks to cloud computing, and mobile is expanding social media. These automatically produce machine data, or categorical logs and records. Ignored for years, technology is now available to mine the data for corollaries that can provide operational intelligence.
“When somebody goes to a website, I can see the customer’s behavior and then see if they have a slow response or a problem,” says Jeff Hodges, director of channels for the Americas at Splunk, a San Francisco-based company that monitors, collects and indexes the data in real time so clients can improve operations. “Then I can correlate this with social media to see what they buy and what they say about what they bought.”
PagSeguro is doing something of the sort. The Sao Paulo-based company tapped Splunk to consolidate data from its online payment services in one place to meet security compliance. Soon, they realized they could use the information to manage their services, helping to reduce service response and troubleshooting times. PagSeguro now is correlating “marketing and customer information to see if its advertising and sales campaigns are effective,” Hodges said.
Mining big sets of data can uncover even minor solutions with big payoffs, he says. For example, looking at the data for a dimmer switch, a Splunk user found a 1 percent savings in power consumption. In making a jet engine, such a discovery can save $10 billion. Or on a locomotive, $60 billion, Hodges says.
There are challenges for the deployment of these technologies. Few companies are training their IT staff in their use, nor are universities, says Nevoa’s Hagewood. That means the expertise likely will come from startups.
Intel Capital, the investment arm of California-based semiconductor chip maker Intel, invested in two such ventures in February: Brazil’s Geofusion and WebRadar. The former helps clients to map out expansion by analyzing market data based on geography, such as the best location to open a new McDonald’s restaurant. WebRadar helps clients mine big data to improve operations.
Martín Frascaroli runs another: Argentina’s Aivo. It designs virtual assistants for round-the-clock customer service without employees.
The assistant fields questions over a corporate website, Facebook and elsewhere. Got a question about Fiat’s newest model and how much it costs? Ask Luigi, its virtual assistant. You can also ask him if he likes pasta or pizza best, how he’s doing and, well, what he thinks of Fiat CEO Sergio Marchionne. There’s no waiting on the phone to get cut off all of a sudden, or for a customer service rep to bumble out a feeble response.
Frascaroli is now working on voice-recognition virtual assistants for mobile phones, smart TVs and hologram projection. He says the generations growing up connected to the web will demand such services – and even more. “There’s going to be more focus on the value of time and not wasting it,” he says. “Technology will need to respond.”
Charles Newbery reported from New York.
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