The Mexican Appetite For Large-Scale Business Transformation

The Vortex of Change

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In business, a new norm is upon us. Static industrial age models are being turned upside down, as the ability to ‘innovate with velocity’ has overtaken size as a key driver of success. Businesses need to be able to roll out new products and services in previously unimagined timeframes – we’re talking weeks, even days, as opposed to months and years and if you don’t do it someone else will!

An agile, modern, flexible IT infrastructure underpins the 21st Century business, but this alone does not guarantee success. IT deployments need to happen hand in hand with large-scale workplace transformation.

At Intel we refer to this whirling mass of business, technological and cultural transition as The Vortex of Change. Once the dust has settled only the innovative will emerge in one piece; the nervous and slow will undoubtedly struggle to stay relevant.

The SMAC stack

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At Intel and beyond, the SMAC (Social, Mobile, Analytics, Cloud) stack is recognised as the Digital Platform model required as the starting point to drive this large-scale business transformation. I’ll recap quickly on what we mean by SMAC stack but for a longer and more detailed description I’d recommend you read this blog from my colleague and good friend Jim Henrys.

  • Social

Democratizes ideas and options, eliminates traditional hierarchies for communication, sharing and connecting

  • Mobile

Allows us to work any time and from any where

  • Analytics

Enables filtering of information to create observations, predictions, and drive real-time decision making

  • Cloud

Provides access to information for collaboration anywhere, any time and on any device

How is this manifesting in the real-world?

We know from our interactions with customers that the vast majority of organisations across the globe acknowledge the fact that they have to become more nimble in order to survive. We also know that the SMAC stack is recognised as the starting point to Digital Convergence, which is fusing the best attributes of traditional business with the agility of digital business. Nowhere is this more evident than in Mexico.

I was lucky enough to take a recent trip to Mexico City and witness a country on the move. Mexico has an awful lot going for it:

  • Great labour market

Above all else, it’s people that drive transformation and Mexico has a great labour market with high-quality manufacturing output. This makes it very attractive for companies looking to invest and use Mexico as a hub from which to expand into other areas of Latin America.

  • Huge potential for e-commerce

Traditionally Internet penetration in Mexico has been low as many families do not own a computer. However, analysts are now predicting an increase in internet users from 65 million in 2015 to 80 million in 2018, driven primarily through increased smartphone and tablet ownership together with falling data costs. By 2017 the number of smartphone users is expected to exceed 54.4 million, while in 2015 Mexico will have the highest tablet penetration in Latin America at 35 percent. Couple this with the fact that Mexico has 112 million inhabitants, many living in areas where physical access to goods is harder than in countries like the US where most small towns have a Walmart, and it’s easy to see the huge potential for e-commerce

  • Growth in IT 

Analysts are predicting a CAGR of 7.2 percent in IT spending over the next four years driven by a convergence of income growth, declining device prices and Prosoft 3.0 – a supportive government ICT development policy. Cyber security software and services, cloud computing, retail hardware, demand for tablets and hybrid notebooks and outsourcing will drive this trend

  • Great business conditions

When compared with Brazil, for example, Mexico has 30 percent more GDP per capita and conditions for doing business are arguably more attractive. It is ranked number 39 in the World Bank’s ease of doing business index, while Brazil is ranked 120.

When it comes to individual companies what I saw in Mexico is consistent with what I’ve been seeing globally – businesses recognise that they need to change if they want to stay competitive and, in some instances, they are ahead of the curve. Many of the customers I spoke to were not only aware of the changes they needed to make to survive the Vortex of Change; they were already putting plans in place and taking concrete steps towards implementing them.

Turbulent times ahead

However, change is not easy. While many of the customers I met with in Mexico have transformation plans in place, the next steps will be less than straightforward. It was clear to me that many businesses are on the lookout for partners who can give them advice on the technological and cultural change required to get from A to B. I’d like to think that Intel can be a valued partner for many of them, offering an independent, global perspective on how transformation is being driven across industries.

Breaking it down, there are roughly five key considerations businesses should take into account when making the transformation from industrial age (static, slow and immovable) to digital age (nimble, fast and innovative):

  • Being data driven

What data have we got, what can we do with it, and how can we monetise it?

  • Being on demand

How can we economically and rapidly deliver value-add services to customers who want everything immediately?

  • Being secure

How do we move from playing Whack-A-Mole to managing risk in a proactive and cost-effective manner?

  • Being customer centric

How do we win and retain customers through properly connected experiences?

  • Being innovative

How do we attract and retain the talent to drive innovation?

In Mexico these changes and considerations are not hypothetical; they are real and they are happening right now. My next blog takes a closer look at some of the Mexican businesses I met with on my trip and examines their progress down this path.

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