We think it would be useful to share some insights and thoughts about how IT vendors could monitor LATAM as it goes through the Covid-19 pandemic.

Latin America’s leading companies are very much committed to better serving their customers through the aggressive implementation of digital transformation initiatives.

These efforts are being supported by Agile and DevOps principles that encompass people, processes and technology. Its fascinating to see how large enterprises in the region have launched new organizational structures around “tribes” or agile teams, for application development teams and business units alike; set goals around new metrics that measure the speed of delivery, value and quality of new or enhanced services; and the myriad of technology adopted to achieve continue integration, testing, deployment and monitoring. And although digital transformation projects are very prevalent in the financial services industry, there are also active efforts in industries such as Telco, Retail, Media, Industry, and Government.

Overall, 2019 is looking to be a good year for Latin America
 
2018 had significant headwinds for the region: the electoral cycles in three large countries, Brazil, Colombia and Mexico; the economic adjustments in Argentina; and a transitional government of president Temer in Brazil after the impeachment of president Rousseff in 2016.

IT companies with growing revenues and strong mindshare in their home market need to determine early-on when to start their internationalization processes.
This question has become much more time sensitive and strategic as the cost of information has gone down significantly. Barry Downs and Paul Nunes, in their 2014 book “Big Bang Disruption” captures this issue well when they state:

• “Consumer no longer have any excuse for making and uninformed purchase”
• “The cost of search has fallen below the cost of regret”

In the book “The Rise and Fall of Nations” by Ruchir Sharma from Morgan Stanley, the author presents 10 factors that are critical for a country economic success. His first chapter is on population since demographics plays such a critical role in a nation’s wealth creation.

Countries with a growing talent of workers like India tend to experience much faster growth that countries that their population are shrinking like Japan and Italy. Note also that there is a lag between the change in GDP and population growth since it takes time for a new borne to reach working age.

Enterprise IT vendors goal is to operate in the WW stage. Besides the financial rewards, other market realities drive this goal: information about technology vendors could be accessed from any corner of the world; large banks, telecoms, retails, airlines, etc., are found in all regions of the world; innovating companies with sophisticated customer engagement processes are doing business in all major metropolitan areas; and the skipping of technology waves in less advanced economies that allows then to catch-up faster to new technology models. Many times, these market facts run ahead to the vendor’s implementation plans.

How to Enter the Latin America Market?

Latin America and The Caribbean is one of the most dynamics regions in the world having an economy of US$ 6 trillion, population of 620 million people, and an IT market estimated to be $300 Billion. The size of the Brazil’s and Mexico’s economies, the new insertion of Argentina in the world financial markets, and the growth experiencing by Chile, Colombia and Peru makes this region a very interesting one for IT vendors to participate in.
As described on our blog dated March 26th, the region brings a level of complexity that requires knowledge and experience in the various countries to be successful. In addition, the current economic slowdown has caused a recession in some countries like Brazil.

One of the question we most commonly answer to companies entering the Latin America is if doing business South of the border is that different. The answer, similar to other international markets, is: Yes, and No.
On the No side, doing business in Latin America is similar to the US since Latin America is comprised of democratic countries with market driven economies, the rule of law, comparable vertical markets, and technology adoption that--with a time lag—mirrors the US.