India - Interviews
Watershed - New Soft Intelligence (NSI) is recognized as the best provider for foreign trade applications in Latin America. It has 15% of the Brazilian market. It has been Oracle’s global partner for the last 15 years. It received the Dell Prize for Technological Excellence with compliments of Michael Dell. It is 100% Brazilian. What are the reasons for this performance?
André Barros - The origins of our company are in the mid 80`s when our director Roberto Garcia (then IT manager of Freios Varga company – present TRW) saw a good opportunity in the “new” technological wave of the time: the transition from mainframes to micro informatics. In this period few had access and participated as actively as he did in this scenario. As an undertaker avid for change, he decided to found New Soft Intelligence (NSI) to provide micro informatics services to Freios Varga itself and to other companies in the market. In this way, our first application arose: software for export management. Always in the vanguard since its foundation, NSI bets on technology as a fundamental factor to carry out and optimize its customers´ processes. Young, committed and trained labor is also the other fundamental factor for our development and prominence.
WS - NSI was the pioneer in making software available on the internet, going on to charge for services but not for product. What benefits did this bring to customers? What impacts did this decision have on the business model and the firm’s sales?
AB - In Brazil, this is still a latent model, although it is already a reality in the USA and some countries of Europe. In this model, the maxim that “software is paid for in the same way as electric power or water (that by its use)” is true and causes a valuation of some traditional paradigms. Basically the payment is proportional to the use of the software and hardware resources involved in this process. I would say that this is a concept that grows stronger every day. In this model, the company providing the service has to think of sales in the medium and long term and in a more secure way: a little less is made but the income comes from many more companies. In addition, the whole sales process has to be rethought (from prospection to closing, and this process has to be as economical as possible), the entire project implementation and after-sales technical support has to be rethought, because the potential customers of this method, be they large or small, do not wish to spend large sums on implementation projects.
WS - The case of NSI shows that Brazil is in a position to compete in technology. Is there a policy of incentivizing technological development in Brazil? Are there actual actions for support for small and medium sized companies?
AB - In fact, Brazil has great potential for competing with technology in the international market. Let us take as an example, software production. In the public area, applications developed here are international references. We can cite our electronic voting machines; our system of tax declarations (which is what the internet is most used for); our integrated system for customs clearance (SISCOMEX). These are large examples of pure technology that stands out internationally. In Brazil, there are several organizations such as BRASSCON - Associação Brasileira de Empresas de Tecnologia da Informação e Comunicação (Brazilian Association of IT and Communications Companies) and SOFTEX, whose function is to promote our software internationally and work actively with governments and universities. For software, there is also the PROSOFT credit line at the BNDES, which allows companies to take credit to finance the implantation of project software (as long as the supplying company is Brazilian). The reverse side of this entire story is still our tax burden on the service. Brazil manages to be 50% more expensive than its main international competitors are, according to BRASSCON, and because of this, many deals are not closed. However, I believe that few countries have our potential when dealing with technology and more precisely, software development.
WS - China and India have invested solidly in education. How should Brazil develop skilled labor to face its new global challenges? How does NSI train its employees?
AB – About 80% of our employees are graduating or are graduates from universities in IT or foreign trade, 20% are trainees, also with technical expertise in IT or foreign trade. All, without exception, learn English and/or Spanish (courses sponsored by NSI). A good part moreover, has post graduation in business management, project management or foreign trade management. Limeira hosts great colleges such as UNIP (with an excellent foreign trade course), UNICAMP (which chose Limeira to make its second largest investment in the last 40 years in a campus outside of Campinas) and COTIL (UNICAMP`s technical college). Alliances with these institutions bring to our team committed people who envisage in NSI a concrete possibility of professional and personal growth. Private initiatives like this generate a virtuous circle where education becomes the basis for industry development, which in turn grows and demands more qualified people. Education is a fundamental condition for any company, mainly those that want to stand out in globalized and competitive markets like ours.
WS - Infrastructure is another area in which the Chinese, mainly, invest heavily. What are the most urgent bottlenecks for Brazil to grow at a rhythm of 4% to 5% in the coming years?
AB - I read in a recent CNI - Confederação Nacional da Indústria (Industry National Confederation) publication that the loss of “breath” of traditional international Brazilian customers by reason of the crisis will probably increase the tendency of Brazilian companies to invest in the internal market and postpone or minimize their export strategies. According to the AEB - Associação de Comércio Exterior do Brasil (Brazil´s Foreign Trade Association), the expectation of export growth for 2010 is 12%, against 24% for imports. In the same article, I also read that companies cannot leave exports aside because the retaking of the Brazilian presence in external markets, when international markets recover, may be jeopardized. Therefore, to export is an essential condition for the growth of the country but for this, we have to improve various points in our infrastructure, which are presently bottlenecks. Some of them are bad maintenance of our roads (and the country’s transport system is supported by highways); power oscillations with blackouts; breakdown and crowding of ports; the telephone system, which works in the capital cities of the large commercial centers but is precarious when we get away from them; and limited access to broadband internet , among other factors. These bottlenecks, added to a very high tax burden certainly put us at disadvantage in the global scenario: we need to improve in these aspects.
WS - Chinese and Indian companies show commercial aggressiveness in the search for new overseas markets. Is the Brazilian businessman not too focused on the internal market?
AB - I do not think so. We are always living the reflex of the interpretation of the “current scenario” of the economy. At times because of some oscillations in the global economy, we are forced to look more towards our internal markets (as stated earlier, the lack of international appetite, caused by the recent crisis, will make companies look more vigorously to the internal market in 2010), but this does not definitively interrupt export plans which, apart from being necessary, should continue. Technology exports from the software sector, for example, tend to break through the US$ 3 billion mark in 2010, according to BRASSCON. I also believe that all the forecasts and optimism are realized (or not) based on the reaction of markets which the Brazilian businessman sees in government actions in the face of adversities which arise.
WS - What competitive differentials do we Brazilians have and do not use or know how to use?
AB - Brazil is one of the largest countries in the world. An executive of any medium sized company in Brazil has contact with other executives from other units of his company in various regions in our country. In this way, we end up getting used to and adapting to the most varied relationships, (considering the customs and cultures of each region). As large as our country is the mass of tax regulations that rule our economy. We learn to be open and think “outside the box” to solve various types of problem. We gain with this a dynamic and incredible experience that can be used in various situations, be they negotiation and/or problem solving in any of the regions in the world. By virtue of all that, I think that the Brazilian executive is very extroverted, perceptive and adapts easily to the various situations imposed by the business world.
WS - Brazil felt less the effects of the global financial crisis, just as China and India did. Are there already signs of recovery of our export markets?
AB - Yes. Our trade balance has shown itself to be stable, even with a small retraction in relation to 2008 of 1,4%, and probably in 2010 we will witness a recovery in these numbers. As mentioned already, the estimate of the AEB is that exports will grow around 12%, however, imports will tend to grow at a faster rate, around 24% in 2010. This probable import growth rate will happen by virtue of the exchange rate and growth of internal consumption. Even so, the result of this operation is a positive balance (superavit) of US$ 12.2 billion in our trade balance.
WS - What are NSI´s goals for 2010?
AB - NSI will continue to invest in technology. At the Intermodal Fair of 2010, we will show our new information management technology tool - ECOMEX Portal - totally remodeled and with state of the art technology; we will also invest in training and well being of our employees with new people integration programs and training support. Finally, we will work greatly on our installed base clients with the goal of increasing income, and also we want to close the first semester with an expanded project base; we are forecasting an increase of about 10% in new accounts.
Interview by Marcos Guedes Pereira