Seizing the Opportunity for Digital Acceleration with Agile + Nearshore

Benni Lopez

US Market CEO & Global Managing Director - Industrial at Softtek

David Jimenez

Global Managing Director - CPG at Softtek

Learning Objectives

Rapidly evolving consumer preferences and the shift to digital channels has created a wealth of value creation opportunities for those that can capture them ahead of the rest. Join us and explore how to implement a model that is helping leading CIOs accelerate their digital programs, by leveraging agile processes, adding a Nearshore™ component, embracing more agile ways to source, while focusing the efforts on value streams that put customer needs at the center.


"As a company, Softtek is an automation first shop. "

Benni Lopez

US Market CEO & Global Managing Director - Industrial at Softtek

David Jimenez

Global Managing Director - CPG at Softtek

Transcript

David Jimenez

Thank you very much everyone for joining this presentation. Let me start by thanking Quartz for putting this CIO Visions event together. I’m very excited about the amazing lineup of content that we will be seeing during this event. I’m also very excited about this presentation.


First, let me start by saying I hope everyone’s keeping safe with COVID, and ready to get vaccinations whenever we can get them. Talking about getting into the subject of seizing the opportunity for digital acceleration. We have Benni Lopez, he’s going to be with me here in the presentation. Benni is a Global Managing Director for Industrial and also the Head of the US market. Hi, Benni. Myself, David Jimenez, I’m the Global Managing Director for CPG.


An interesting topic—one that I really like—now more than ever, companies are striving to become agile enterprises. Some companies, mainly normal companies, were born agile, so all of us need to adapt to this. We can all agree that we need to get there and be very agile, and also understand that agile is not necessarily an end state, but it’s a state of consciousness in constant evolution together. We will talk about digital transformation. We will talk about some examples of companies that have been through this road. Also, we’ll talk about the pillars for really getting into an agile enterprise. Lastly, how Nearshore can help enable this.


Very quickly, let me tell you about Softtek. We are the largest private IT services provider from Latin America. We are headquartered in Mexico, and our US headquarters are in Dallas, Texas. The US is and has been for a while now or our biggest market. We coined and trademarked the term “Nearshore” many years ago. For some reason, we haven’t monetized this concept because, as you’ve seen, it’s out there in many different business contexts, but we did trademarked it 26, 27 years ago. Lastly, we cater to different industries, as you can see in the bottom of your screen. We’ll share some of these examples. Benni will share some of his success stories with different clients.


We’ve been talking about digital acceleration for a while now and this adoption of digital, but really what we’ve seen is a very rapidly changing in customer behavior. We, as customers, are expecting everything digital now. When I say everything digital, we’re expecting our experiences to be Amazon-like, everything from ordering lunch from Doordash or ordering your bottle of wine and bottle of tequila from Drizzly or buying a car from Tesla, we’re expecting everything digital and everything seamless. Clients and customers are not necessarily as loyal. I believe that doesn’t have to do so much with the client as it has to do with just the availability of options that we have right now. Companies cannot lag behind that, they really need to be ready to have a strong availability of the product, but also have a very strong value proposition out there.


Also, we have this incredible concept that has, during this pandemic, become very relevant, which is being called the homebody economy. Customers are really changing or we’re really changing how we spend time, and what we are seeing is it more and more experiences and shopping behaviors will revolve around homes. Mainly what we’ve seen is an unprecedented crisis, a crisis abroad, changing in demands, changing margins, really collapsing supply chains. Many of us had a global supply chain that was really challenged during the pandemic. We had to adapt to, and be more resilient. This crisis, like any other crisis, brought just unprecedented opportunities, which very interesting is, as usual, brings new needs, new markets, and new solutions. This challenge is not going to be won by whoever understand these new needs, it’s going to be won by whoever is ready to put a product or a solution out there to actually meet those needs, and do it in a very agile manner, doing it very fast, and also scaling it very fast.


Talking about some of these examples you have on health, you have more [unintelligible], which is just at the forefront of what’s going on right now. Think about the health industry. The health industry was heavily scrutinized not more than 14 months ago, because of the opium crisis, and because of the challenges in prices of different medicines, but they were really agile in adopting this new technologies. Their valuation went from 6 billion to 72 billion in 12 months.


We also have Tesla, which I mean, I don’t have to elaborate on Tesla, but they really just changed the whole experience of buying and owning a car. You go online, you buy your car, it gets delivered to your house. On top of that, you get updates into your car, just like you get on your cell phone. Another case of really changing things.


Disney has been probably the king of customer experiences for a while now. Disney Plus is also a very interesting success story of a really nice platform, which in 12 months [inaudible] 86 million.


Benni will talk about platforms and the importance of platforms, but you really need to have your platform ready to start becoming digital. What do we see in these different stories that’s just common between them? We see these four pillars for digital acceleration. We’ll talk about experimenting, agility. Benni will elaborate on the importance of being very agile to experiment very fast, to test very fast, and to put out there your innovations. We’ll talk about platform agility. You can do all of the experimenting we want and great experiments, but if we don’t have the platform ready, we won’t be successful. We’ll talk about talent. I believe talent is one of the most important things. As we know, we’re just as good as the talent that we have. Lastly, we’ll talk about operational agility and how actually operational agility and automation can help with that scar ceiling talent that we’ll discuss too. With that, Benni, I’ll pass it on to you so that you can talk to us about experimenting agility.


Benni Lopez

Thank you very much, and thank you everyone for joining us. I echo the best wishes for everyone to be safe and sound, and feel sane in these crazy times. I’m going to be talking about the first pillar that David was mentioning. We know we’re having a continuous—we have the need of a continuous cycle of trying out new ways and ideas. This is what this is about. What we’ll do in this section is take a very practical approach using case studies, how companies are doing it and how software is helping them with big two types of studies. Companies that use Diageo for a rapid response to the COVID-19 crisis they face in their businesses, and companies that only were able to react quickly, but are also building the next chapter of their business models. So, bear with us, and we’ll get you to some interesting insights we found in a very short period of time, with some great results coming from them.


In this slide, we have examples that have to do with reacting to potentially existential threats in their crisis of their businesses, how they solve them, and, as I was mentioning, potentially creating an opportunity. No matter how quickly they had to react, the discipline to create the solution was rigorous to make sure that the results were achieved. You need to have the framework. You need to have the methodology. You have to have the process to be able to continuously iterate in getting to this results.


Let’s talk about the first example. This is a company in the food business, obviously, it’s in the essential business category. One of their divisions specifically was related to poultry. As you know, it’s important. The number one challenge was how to keep their employees safe, and how to avoid disruptions to the whole food chain, which is critical for everybody here. What we did is we got it on with them, and we quickly created a digital passport to be able to go to work safely. We digitized the changes in operational processes needed to adjust the new reality. By this, we brought in our platform, we call it resilient. With additional iterations in record time, we continue to address the new needs as they come. It will become part of their operational status quo of their standard operational procedures now—the use of digital passports, and how they allocate the different workers in the different facilities in the times.


Benni Lopez

Another company, moving on to another example, that needed to implement a low touch alternative, given the current health situation for the clients at the restaurants and retail source, and expo globally is the one in the middle. Very quickly, they had to react. The good news is that traffic slowed down a little, so they were able to test these low tech solutions that we developed with them. Now the traffic in the airports is being [inaudible], they have now a safe environment to take care of their clients of the retail as well as the restaurants in airports around the world.


The last example is a top nation chain of gems to whom we pivot to develop alternative ways to keeping engage with our customers digitally, and hyper personalized experience to sustain long term value for them. Those last two, not only reacted to the crisis, but were able to develop a sustainable basis on how they would do that. The way to do that is we have a tough test suite of solutions to implement this, supporting design thinking, workshops, making sure relevant stakeholders are present and throwing in ideas, both from the business eyes operations, IT. We have innovation labs that have a methodical approach to implementing the cycles, so select and capture the ideas that can help solve the problems. We have the methodology to help prioritize. Then, we have all the resources such as a pilot factory, and a network of over 20 COEs that specialize in a specific technology or process such as APIs, micro services, IoT, user experience, consumer experience, artificial intelligence, robotic process, automation, etc. We bring in all these resources with a methodical approach with a framework to help iterate and develop those ideas quickly and scale those that makes sense.


We have more examples that are becoming new business models. Based on hyper personalization, low touch services in the shop when you take your car, for example, we have this German automaker that were able to take your car to service without the needs of actually interfacing with any other person. You just get into the kiosk, and you drop your keys there, everything is well secured, an authenticated augmented reality to improve sales in heavy equipment, because it’s very difficult now to have people travel and is probably going to take a while. Those solutions were able to be deployed very quickly with that.


Another component to make sure that this is done quickly is the platform. The first session was about the experimenting. The methodical approach for quickly having iterations on how to implement new ideas and scale. It’s important to mention the role that platforms or business source play in this—it’s a fascinating topic—because we know that there are digital natives, some of them were mentioned by David. There are also companies that were early adopters of agile and are now in a better position to react to the business environment, which is clearly and will continue to be volatile, uncertain, complex, and ambiguous environment that will live on. Once again, it’s going to be practical experiences on what most of you already know, which is how to best leverage platforms. It’s hard to be the power of a cloud. You just need to make sure the economics work to your advantage. Some of our clients are creating their own platforms, partnering with us to build around them, or they are, in a way, becoming a platform themselves. Their business model is, in a way, transformed to be a platform.


We have the basics. We all know that we need to have a smart agile architecture, leveraging existing platforms development one. Why we’re doing that? To be able to address those client demands, and respond to the pace of your business needs, and realize that they need to be even faster, you need to move even faster. That’s the good news—that we have the support of business because they want to move quickly. The reality that we normally find is that the environment we live in, you have this type of challenges, where you have to understand that because of how you grew potentially through acquisitions or because of the scale of your company, the different architecture, your existing or legacy architecture, both on how you address the clients on the front end with the different channels that you have, the middleware that you have been building for a long time on how to interface between those channels, and your back office applications that run the transactions or your business where you develop the nature of your products or services does not necessarily help you address the velocity that you need to have in order to meet those demands. The good news is that we have all this pressure, we have all this demand, the challenge we face is how to take care of the existing environment that is difficult to maintain. Depending on when you started that journey, you’re going to be able to accelerate the pace of transformation.


The good news is that it can be done. Here are some companies that we have helped in different industries with different degrees of challenges. Some of them started the journey before than others, there are legacy environments or technological debt or agile debt or any type of debt buried as also was the level of mass in the architecture, especially the growth requisitions, as I mentioned. Evidently, in the first example, the movie theater chain had to pivot dramatically. It could only have been done once senior leadership, which is a key component. We need to make sure that senior leadership is on board. Starting with the CEO, made the commitment to accelerate and embracing the big agile across the enterprise.


Another example I like is in banking—the second one—because in their journey that actually started several years ago, and as you can imagine, it’s hard to think of a more complex environment in legacy architecture than a bank. The road to a [unintelligible] that we started with them, probably almost four years ago, to be able to connect the front end and the back end by re-architecting the whole middleware with application of microservices, allowed them to go further ahead in their vision, which is shared with a lot of the banks of themselves becoming a platform, where they can now access different clients through channels that are not their own, and also offer services or products that are not necessarily theirs by interfacing in the backend with other companies. This is a way in which they have been able to leverage platforms and different concepts by themselves becoming a platform.


All of these examples are fascinating in terms of their journeys. I’m actually inspiring, in many cases, on how they leverage agile and how they leverage platforms to accelerate how they deploy their new solutions. What are the components? At the core was evidently adopting that big agile, a strong commitment to really be an agile organization—not just it, but in general—understanding that you have to set up the framework to have all the stakeholders involved in this new way of doing things, leadership, support, making sure we have the framework, always leading with business outcomes, and the components we provide apart from the support and embracing the framework, with some advisory.


We provide the micro services and identification support. We provide the cybersecurity, leveraging the cloud in the journey, depending on where your stage, and something we call agile deliver on demand, which are agile pods that have an on site and near shore components that can help you accelerate the development of your paddle. The emphasis here is that it demands a very high degree of interaction, that it’s better suited for near short components. As a company, we all have offshore components. I’m sure that you have a strong legacy of offshore talent, but the point we’re trying to make is that to be able to accelerate this journey, the near shore model is potentially better suited for that.


Lastly, let me share a quick example of how the journey looks like in a timeframe, in hindsight, in a way, this started just over three years ago, in 2017. It’s important to note, and I haven’t mentioned this yet, that the foundation is also important for ITIL. With this particular client, we consolidated all the [unintelligible] to both apps as well as infrastructure. In that exercise alone, we held them cost out about 30% of the existing costs with incumbents as well as their internal costs. Then, by establishing the concept that we mentioned, first in making sure that they had a strong ITIL foundation and we began with the automation journey that they needed, migrating to the cloud, implementing RPA. Very important decision was to go to Site Reliability Engineering to be able to continue the automation journey, and be able to transition from ITIL to DevOps, DevSeCops, and eventually, everything else.


The yellow line is representing the debt of different types: the technical debt, cultural debt, agile debt. The blue line is the evolution in digital over time. You see the spike in debt because of a couple of acquisitions that they did. Eventually, once you get to the junction of the yellow and blue is when the majority of the work begins to be more automated. Then, the effort of the team can begin to be applied more and more to engineering that allowed us to go to more projects that are on digital such as enterprise data integration. Then, beginning with analytics for consumer forecasting, and predictive analytics, or what we’re calling the AI Ops.


This is an ongoing journey. I’m sure there’s going to be more interesting developments with the consumer behaviors changing because of the pandemic in the food industry. With that, I’m going to pass it over back to you David to let us know a very critical challenge, which has to do with talent and how to address that agile.


David Jimenez

Thank you very much, Benni. Now, we’ve talked about experimenting agility, platform agility. Now, let’s talk about talent agility. I mean, how do you make experiments happen, platform happened, we need to tell it, right? We’d not just need the talent but we need the right talent. Talk to any CIO, VP, Manager, any level of the organization, and they’ll tell you that talent is one of their biggest concerns. Once you have someone leave the organization or you’re looking for a certain role, and you’ve been looking out there for a while, as I’m sure we’ve all been, you realize how stressing finding the right talent can be. Talent is a very scarce resource. It’s not an infinite resource. They only talk about talent within the technology industry. Gets even more interesting, right? We are competing with the likes of very big companies like Amazon, and Google, and Facebook, and all these technology companies. Now you add to that, the home office, and how successful we’ve been translating to a home office environment. This race for talent is just getting more and more and more intense.


We have three challenges. One of them is the challenge to fill the positions. Very related to the challenge, the challenge to get the right skill sets to match those requirements. Up to that, that we need that data scientist, artificial intelligence, cloud architects, IoT technologists, and just the resources that are not necessarily out there. Then, you have the notion that within the next year, two years, three years, five years, this will get even even more scarce. Why would it get to that? Because the need for these resources will only keep increasing, and getting these resources ready out there from universities are translating down from other lines of engineering fields to technology just won’t be as fast.


What do we do? As Benni was saying, we’ve seen, and it’s working tremendously great, is near shore for these agile programs. Why? Because of cultural alignment, and real time collaboration, and the productivity that you can achieve through near shore. As I said, this is something that we coined, trademarked some 27 years ago. We did it for a very different types of services. We did it for traditional development. We did it for maintenance and support. We did it for infrastructure services. When agile comes into place, and you need to work very hand in hand with the IT functions and with the business functions, and I’ve been doing this in like hand in hand, shoulder and shoulder manner, really Nearshore is proving to be a great way of doing it.


If you think about the different places where you can find talent, you have Asia, you have Europe, and then you have Latin America. We can talk about some other ones, but these are the ones that are getting more more talked about. We talk about Asia, which I’m sure a lot of new companies have a lot of their services to Asia. You have the challenge of cultural alignment with our agile program. You have the challenge of cultural alignment. You have the challenge of ease of doing business because of the timezone alignment. Then, we talk about Europe, you have cost. Cost is significantly higher in Europe. Attrition is very high too, and down to availability can be really challenging. You also have real time collaboration. There’s also a disparity in time zones. In Latin America, the challenge that we have is scale. We definitely don’t have the scale that you can see in some other places, but there’s still tons of very productive talent and very highly trained talent that you can tap into.


We’ve been doing this for a while now. We’ve been doing it successfully for a while now, as you can see. We’ve been doing it in many industries, everywhere from programs of fifty FTS to over a thousand FTS. Mainly, we’ve been doing it for US, Nearshore [unintelligible] for the US with over 15,000 employees and through 11 delivery centers in Latin America, some of them in Mexico and some of them in other countries in Latin America. Doing it for big and really complex companies, Fortune 500 companies.


I guess, more importantly, the main takeaway is what Benni mentioned. Nearshore is very adaptable to agile problems. When you talk about this scarcity, how do we go about this scarcity? We need to make sure that we use automation for that challenge of the talent being out there. Benni, can you talk to us about operational agility, please?


Benni Lopez

Thank you. Yes, definitely. Automation is one of my favorite topics. As a company, Softtek is an automation first shop. We’ve gone through experimental agility, platform agility, talent ability, and now, let’s talk about operational agility. How does agile help you achieve agility at an enterprise level so it touches everything? We believe that that is done with hyper automation. How do you get it to the ultimate level of automation, which is a continuous journey, so this is one of my favorite section, because I think it’s going to make companies successful, given the even faster pace of change that we will see based on how new companies are coming up with new ideas on how technology—very exciting technology is coming up that is going to help us leverage new ways of doing things.


To understand more about the concept of hyper automation, let’s talk about the foundations. What we’re going to be showing, before we go into an actual example, another example. For hyper automation, let’s look at this chart with the different enablers, which are domain area so disciplines that are going to impact different aspects of your of the organization. On one axis, on the left side, you see the business outcomes. Some technologies or some disciplines that are going to impact different levels of the organization, different types of impact of business, whether it’s cost reduction, or revenue optimization, or profit, maximizing your profits, or even potentially creating a new business model, getting underneath the blue ocean in your business. That is the impact that you’re going to see in the different disciplines and technologies from our perspective. On the horizontal axis, on the bottom, you see the extent of automation that these different disciplines have, whether it’s a task level process function, we orchestrate automation, or even automate the business operations, so the different degrees that they can have. Then, on the right hand side of the vertical axis, you have the different business areas of business processes. At the premise IT, but then you get into the back office, then the front end and operational functions of your business.


These three different areas to get to the operational agility, we need to think of the whole enterprise not just IT. That is the impact from our perspective that is different areas so this place will have. Let’s start with artificial intelligence. It’s covered everything global a sudden, because we know it has tremendous impact everywhere. To leverage successfully, we need to take care of all our fundamentals, which we’re going to be mentioning. First and foremost, robotic process automation, which I’m sure some of you have already started in your organizations. The emphasis we have here is to focus on cognitive robotic process automation, not just a script base, which is gonna give you the benefits that you see on the lower left hand corner. The more you’re moving to the cognitive component, the bigger impact it will have. There are alternatives now, including our own platform freedoms that can help you get there faster.


The next component is intelligent business process management, so that when we have a framework to help orchestrate all the different components of your technology and environment, they don’t get to help you with the right execution at the right time of the different theories.


The next component is making sure that you have a mindset of everything ops. This is where IT, as you can see at the bottom, plays a very important role on the implementation of DevSecOps, Site Reliability Engineering, cognitive desktops, which is going to help you accelerate in your journey to automation. Then, you have different type of ops that have bigger impacts in data, cloud, analytics, design, machine learning, and artificial intelligence. The mindset in this case is everything else to make sure that your domain so that you can move faster.


The next component is the intelligent platform as a service coding that we believe that low code or no code will play a significant role to make sure you bring new functionality faster into the conversation. They will need to be integrated into the other components that we mentioned. Again, these are the set of tools that you want to make sure you have in your tool set to be able to be successful. With all of these combined, that I know sounds complex, I’m sure some of you or most of you have already begun experimenting with them is what is going to have you lay the foundation to be able to get to the hybrid automation that we have been discussing.


A quick example. This is an airline. Similarly, it started with making sure we had the fundamentals right: consolidation, ITL, boat access, as well as operations, making sure that we have the management, the processes, the IT fundamentals ready, and then gradually begin to reduce the debt, which is the yellow line, as we began to implement the different components that were mentioned in the previous set of slides. Once you get to that threshold, where ops engineering goes from less than 10% to more than 50% of the effort is when you begin to accelerate and provide even more value as you begin to implement new ways of automating the components of your digital journey.


Benni Lopez

We look forward to the opportunity to speaking with you. We can help with the Agile Nearshore concept that we have mentioned. We have different services in our assessments of the [unintelligible], and after a proof of value that we have different from different components. We have for approval values, ready for everything, experimenting agility, or platform agility, or talent agility, and operational agility. With our experience, we think that we can take you from the assays after proof of value to a much higher level and then obviously, help you on your to be. This is the team that you’re going to be meeting in the one on ones, and maybe you haven’t scheduled one, we’ll wait for you to set up one. I think it’s gonna be exciting to hear what you have to share with us. David?


David Jimenez

Oh, I agree with you, Benni. Looking forward to chatting with you guys to set this sessions with our team. I think the most important takeaway is Nearshore can really be a game changer for your agile digital programs. We’ll be happy to [unintelligible] with you guys, and thank you very much.


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