'We see Brazil as a regional power in innovation'
One of the world’s largest IT services and consultancy groups, NTT Data, a subsidiary of Japanese conglomerate NTT, is upping the ante in Latin America in the wake of the accelerated digital transformation, including in emerging trends such as the metaverse.
The company has set itself the target of reaching a 2% market share in every country where it operates within four years, which would be enough to make it one of the top five global IT services companies, Miguel Teixeira, newly appointed CEO for the Americas region, tells BNamericas. The company is currently ranked sixth or seventh, trailing the likes of Accenture, Deloitte, PwC and IBM.
But there will be hurdles to achieve that, one of which is the scarcity of sufficient tech professionals for the development of projects and to support clients. The situation is similar in most global markets, but it is particularly acute in Latin America.
In this interview, Teixeira talks about digital transformation, investment priorities, workforce woes and the group's expansion plans in Latin America.
BNamericas: You just took over as the head for Latin America. What are your priorities in terms of markets and business areas in the region? What is NTT Data betting on in the region?
Teixeira: Well, before the pandemic, there was already a digital transformation drive. In several events that was the theme: how technology was transforming work relationships and the way people lived in general. With the pandemic, that was accelerated even more.
A set of people who hadn't understood these technological transformation processes started to understand, a set of companies understood that digital channels were no longer a channel, but rather the channel.
I say all this because this new reality has impacted the consulting business in general. We have a lot of work, a lot of demand for projects. We’re at a stage where we help customers to differentiate themselves, but we no longer need to convince them to use technology or a particular technology.
Now, companies that have the best talent traction and retention model are those that will be most successful. There aren’t enough people, in Latin America, Europe or the United States, with sufficient training or skills to carry out all the projects that we have ahead of us in a diversity of areas.
One of our main pillars at NTT Data is therefore to be the company that best attracts and retains talent. This is the main challenge for consultancies in the sector.
For our customers, the biggest challenge is mindset. A client who has a very traditional, very hierarchical mindset, where to make a decision he has to go through different levels of approval, will have difficulty in a world that needs to be agile, in which solutions need to go to market quickly.
BNamericas: Overall, what is NTT Data's goal in Latin America?
Teixeira: I don't know if we're going to get there, but we want to be a company with very large representation in the region, but aiming for value first.
If I can choose between being the number one company, but with concerning quality of delivery and value, I’d rather be number five and have quality, innovation and good professionals.
That said, we have a plan that we started four years ago to make NTT Data a leader in the technological area in the overwhelming majority of markets. But with no shortcuts.
BNamericas: Within what time-frame?
Teixeira: Reaching number one worldwide takes more than 10 years.
What we have as a goal now is to reach at least 2% market share in each country within four years. It's not aggressive growth, it's moderate, because the focus isn’t to grow and gain market share at any cost with a low innovation coefficient. Size isn’t an end to itself, it’s a consequence of doing things well.
Our global objective is to double our revenues within four years.
BNamericas: And what’s the current market share in Latin America?
Teixeira: In the region, we should be at around 1.4-1.5% on average. In Europe … we should be at 0.2-0.3%.
We have countries in Latin America where we already have a very high market share, like Peru, where we have more than 10% of the market. In others, it’s around 1%.
Overall, we want to be a company that’s in the top five. And statistics show that 2% will put us in that range.
BNamericas: On workforce, how are you addressing that, given that the competition for talent is now international?
Teixeira: First of all, we’re working to keep the people we already have. So if a competitor makes our professionals a proposal, they prefer to stay at NTT Data and make their careers here. And that also includes having a good work environment and a balance between remote work and personal life.
When we talk about recruitment, we divide it into two parts: one is to team up with universities and academia, and a second is to reconvert people who are from other areas, who don’t necessarily have a background in technology and engineering, but who have an interest and attitude.
The lack of professionals is huge. Many of the professionals in Latin America are good. But the truth is that the purchasing power of lots of countries here doesn’t match the purchasing power of the US, Canada, Germany. And in a “borderless” working world, there are many professionals who end up working for markets and companies for a much more competitive salary. We have this problem.
But in short, internal focus, by working together with universities and academia and doing our own process of conversion and training.
BNamericas: How big is the group’s staff in Latin America? Are you expanding that base?
Teixeira: Right now, considering all seven countries in we operate on the continent – including the United States where the operation is still relatively small – we have approximately 16,000 people. And yes, we’re hiring in all regions.
Brazil has a share between 25% and 35% of the total. We've just opened two regions, two hubs, as we call them, because we’re betting on a hybrid model, in Florianópolis and Recife.
It’s normal for Brazil to have a high proportion. It's a market of 210mn people, it's an economy that’s completely different from other countries and, what’s more, we see Brazil as a regional power in innovation.
Just two examples: startups and, now, more recently, the metaverse. We’re now doing projects in the metaverse format in the country.
We hope to have authorization from customers to communicate it soon. But it’s clearly an area in which Brazil is starting to be a pioneer and it’s something that we want to take advantage of, later, in other countries.
Today the metaverse is still in its infancy. It's an augmented virtual reality. But in a few years it will be much more than that. It's going to be an alternative, immersive world, and the brands will have to be there, the customers will have to be there. In fact, brands will have to be where customers are.
In short, Brazil is taking important steps to be a metaverse leader in the region. And it's an area that we’re betting on here.
BNamericas: But beyond the hype, how can the metaverse actually support a process of digital transformation of companies?
Teixeira: The metaverse that people have in their minds is one in which you put on a device, a pair of glasses, for example, and you’re transported to a simulacrum of reality with a virtual character of your own, and there are companies, schools, industries, etc. But this is a world that we might have 10-15 years from now. We're not there yet.
What we’re creating with companies is putting business in the metaverse, step-by-step. A store, a factory. Let me give you an example: we look at a building under construction and we can envision what a certain floor would look like.
Or we can put on glasses and gloves and walk through the detailed representation of that floor. Or instead of going to the football stadium, we’re transported onto the field through the cameras hanging there, watching the action with the players, from the players’ perspective.
We’re currently creating use cases in entertainment (games and sports), in real estate, in manufacturing cars. Many companies want to have their stores in the metaverse, do recruiting interviews in the metaverse.
What we're creating are small fragments, small areas of submergence, but where we don't have all of that connected. Soon this will all be much more immersive. Even with the possibility of us being able to smell in a virtual world.
From a business point of view, the metaverse reduces risks for some professionals, travel costs, fuel costs reduction, etc.
BNamericas: How much do you plan to invest this year in Latin America?
Teixeira: We don't generally break down the numbers by region. But what I can say is that we’re investing more and more in Latin America based on our global and continental project. We're talking about many tens of millions of dollars.
BNamericas: In industry 4.0, you have a partnership with Telefónica in Spain for 5G connectivity in the port of Malaga. Are there similar projects in Latin America?
Teixeira: Yes, we already have two or three examples of 5G in the region. We’re working with Chile, in partnership with the government, for projects in that area, for example.
And we are starting to work on proofs of concept for 5G private networks, but still very specific. This is the case of a network in a football stadium.
It’s important to point out that one of the mottos we’ve set for these next four years is “NTT Data Americas 5.0”.
It’s a concept more related to society 5.0, that is, an evolution of industry 4.0, where the human being is at the center. Technology only makes sense if, in addition to industrial productivity, it delivers value to society in general.
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