When it comes to digital technologies, Latin American companies have had a unique experience.
Since the first wave of digital transformation a few years ago, companies in Brazil and other Latin American countries have adapted to new technologies and processes. Today, though, they’re facing a second wave: Executives now realize that it’s not enough to simply use digital technologies — they also have to evaluate their business models and teams.
Despite understanding this need, however, executives in Latin America have been slow to embrace digital transformation in a holistic way. These leaders often opt for smaller, incremental changes that deliver lower value than expected — meaning they might need some convincing as to digital transformation’s power.
In truth, executives are fearful. At Wipro, we’ve spoken to many chief information, financial, and operating officers who are attached to traditional modes of thinking. When they learn that digital transformation should include cultural and behavioral facets, they feel skeptical. It’s instinctual.
However, that uncertainty goes both ways. The next wave of digital transformation in Latin America could see executives wanting to fully embrace the opportunities it offers. After all, failure to adapt means losing market space.
What’s Holding Latin America Back From Digital Transformation?
Wipro’s digital transformation survey paints a clear picture of how Latin American countries respond when it comes to digital transformation. Here are some key takeaways from the report:
1. They’re hesitant. Out of all countries surveyed, those in Latin America embarked on the fewest digital transformation projects. The mean number of projects taken on in Brazil, for example, was 6.08. Compare this to the global mean of 7.89 and the United States mean of 9.21.
This demonstrates that companies in the region are hesitant to dive headfirst into digital transformation — perhaps due to a lack of knowledge, confidence, or resources. To compete in the same league as their global counterparts, one thing is clear: Latin American countries must ramp up their efforts quickly.
2. They have a narrow view of the benefits. Instead of having a holistic view of how digital transformation can impact their organizations, many Latin American executives narrow their focus on one benefit: revenue. Our survey shows that Latin American countries are more likely to cite revenue growth as the primary motivator of transformation. Although money is certainly key, this overlooks other critical factors, including process efficiency or the discovery of new markets.
3. They have a lower perception of success. Perhaps because of these misguided motivators, Latin American executives often find that digital transformations fail to meet their expectations and needs. In fact, only 4% of companies in Brazil and Mexico view their transformations as “very successful.”
4. They’re struggling to transform their culture. True digital transformation isn’t simply about adding digital assets. Companies that wish to evolve successfully into the future should establish a culture of innovation. Latin American companies find this challenge particularly difficult. They’re struggling to find digital talent, partly because of the shortage of qualified labor available, and cite personnel issues as the biggest obstacle to initiating digital transformation.
How Can Latin American Companies Overcome These Barriers?
The first step is acknowledging that the above obstacles and biases get in the way of a positive, highly effective digital transformation.
For Latin American companies to become global competitors, they must elucidate the difference between stop-gap digital transformation and the holistic shifts that create lasting results. Initiating that process begins by finding, developing, and nurturing people who can build a culture of innovation within your company. People — not profits — should be at the very heart of your transformation.