Soccer team in a huddle

Digital Transformation Will Help Brazil Bounce Back

January 7, 2016 by Cristina Palmaka 59

Brazil is in its worst recession in decades, but I was very encouraged when I recently attended the APEX award ceremony in São Paulo to honor companies that contributed to the growth of the country.

Economists believe now is the time to focus on exports, and APEX, a Brazilian agency whose mission is to foster Brazilian competitiveness globally, is doing exactly that.

This year 13,000 companies exported Brazilian goods to international markets. Most of those companies are small or mid-sized enterprises; in fact, smaller companies make up almost 99% of all Brazilian enterprises and contribute 25% to the country’s GDP. But these companies face many challenges, especially when it comes to doing business across borders! Besides language and cultural barriers, there are many legal and administrative hurdles.

Perhaps the biggest challenge for companies of all sizes is the digital transformation required for doing business successfully today.

Examples of Excellence

According to a study by the Economist Intelligence Unit, 69% of Brazilian SMEs consider it a top priority to use technology more efficiently. For me, this underscores the importance of supporting SMEs with the best possible technology.

PADO, a Brazilian lock manufacturer, for example, is now running its  systems from a central station without interrupting production. Because it is all running in the cloud, employees  can access data from any device anywhere, any time. This has reduced the time it takes to make decisions by 50 percent! New tools also allow them to visualize data in different formats. Machine operators can make changes to the designs of the locks in 3D right at their stations. This kind of technology makes the company more efficient and more competitive as they seek to expand their business outside of Brazil.

Manufacturing companies in general are suffering  because of the recession. While many of them are fearful of change, some are taking the opportunity to invest now so they are ready for the upswing when it comes.

For  example, even though vehicle exports in Brazil decreased by 19% last year, Randon, a Brazilian manufacturer of commercial vehicles, is investing now in cloud technology to increase efficiency rather than lay off large numbers of factory workers. As the biggest employer in its region, Randon is committed to its people and is proactively using technology to help eliminate maintenance costs, improve governance, and reduce inventory levels as well as manage people more successfully.

Optimistic About 2016

I am not the only one who believes technology will play a vital role in growing the economy. Just a few weeks ago I attended the IT Forum Expo and met my peers from Microsoft, IBM, Totus and other IT companies. The mood was  optimistic, but we all agreed that the biggest challenge for Brazilian companies is digital transformation. That will be the number one priority in 2016 because business is deeply impacted by trends such as hyper-connectivity, cloud computing, and smart technology.

And let’s not forget -even in a recession, 200 million people still have a lot of buying power. Brazil is one of the largest consumer markets in the world. That’s because 40 million new consumers have joined the middle class in the last decade. They are purchasing mobile phones, TVs, and healthcare products through a variety  of channels, not just in physical stores.

As I said at the APEX ceremony where SAP was honored for its productive investment in Brazil, digital transformation is not a future vision. It is a fact of life, and I am very excited about helping Brazilian companies transform, so they can continue to expand beyond borders and grow business locally.

Cristina Palmaka is president of SAP Brazil.

Top image via Shutterstock

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