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2021 All industries in Mexico have gone through a monumental shift following the pandemic. COVID-19 marked a turning point for consumers and businesses in the country, who overnight had to adapt their processes to a market that was unknown at the time. While some services and products have seen positive outcomes from these changes, others have not. Companies were forced to innovate, accelerate their digitization processes and think out of the box to avoid lagging behind.
The road has not been easy for anyone. Limited budgets, uncertainty over the course of the pandemic and even a lack of legal clarity are some of the hurdles that companies have faced and that still remain a barrier in the medium term to investment and expansion in the country.
However, opportunities for growth remain. Investors’ eyes are already on the region and business leaders agree that the country still has time to take a different direction to become a more globally competitive nation. At Mexico Business Forum 2021, industry leaders from different sectors gathered to discuss the challenges they have faced in recent months, the opportunities they are seizing to stay competitive and the trends that will shape the direction of their industries in the coming years.
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C onf e r e nc e I mpact
214
companies
86
11
speakers
How would you rate the quality of the conference program and speakers?
46% Exceeds expectations 32% Greatly exceeds expectations 22% Meets expectation
Breakdown by job title
29% CEO/ Director General 27% Manager 25% VP / Director 8% Analyst / Executive 8% Founder / Partner 4% President
sponsors
visitors to the conference website
12,483
conference participants
372
CONFERENCE SOCIAL MEDIA IMPACT
28,014
direct impressions during MBF
PRE- CONFERENCE SOCIAL MEDIA IMPACT
direct pre-conference LinkedIn impressions
96,605
click through rate during MBF
2.80%
conference engagement rate
4.21%
2.89%
3.73%
pre-conference click through rate pre-conference engagement rate
C onf e r e nc e I mpact
Mexico’s leading B2B conference organizer introduces the world’s leading event networking platform. Delivering intent-based matchmaking powered by Artificial Intelligence that connects the right people. Network, no matter where you are.
1,318 matchmaking communications
309 participants
How would you rate the quality of the matchmaking on Brella?
184 1:1 meetings conducted
60% Meets expectation 24% Exceeds expectations 16% Below expectations
MATCHMAKING INTENTIONS
1,245
Total
1,549
Trading
184
Recruitment
120
Investment
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C ompany Att e ndanc e
• A2B Skin Care
• Circutor
• Galileo
• Ace Oil Tools
• Climate Bonds Initiative
• General Electric
• Adevinta
• CMV R&R Partners
• Genesys
• AhKimPech
• Cobroamericas
• Genpact
• Albanesi Tech Legal Consulting
• Colegio de Ingenieros de Minas, Metalurgistas y Geólogos de México
• Global Business Inc
• Alfonso
• Commerce Mind
• ALLVP
• Conekta
• GPTW
• AMAVe
• Cornershop by Uber
• GreenID
• Amazon
• Cuéntame
• Grupo Casgo
• Angel Ventures
• DESCIFRA
• Grupo Comercial Chedraui
• AOLM
• DHL
• Grupo GOCA
• Ap
• DNV GL
• Grupo Roales
• Arcus
• Dostavista Mexico
• Grupo Samaredi
• Aruba, a Hewlett-Packard Enterprise Company
• Dow Mexico
• HAMOC
• Dynatrace
• Heerema Marine Contractors
• ASCENCIO CE
• Embassy of Canada in Mexico - Ontario Government
• Hellmann Worldwide Logistics
• Asesoriaenfarmacias.com
• Embassy of Italy
• Holland House Mexico
• ASOFOM
• Energy to Market
• Honeywell
• ATCO Energia
• Eolis
• Huawei Technologies de Mexico
• Atradius Trade Credit Insurance
• Eppendorf do Brasil
• Humanologo
• Ausnutria Nutrition
• EPSCON
• Iberdrola México
• Axios International
• Expat&Co
• ICAN
• Axon Interconex
• Expediente Azul
• ICM
• Banco de Mexico
• Export Development Canada
• Becerril, Coca & Becerril
• Exterran
• Instituto Nacional de Ciencias Médicas y Nutrición Salvador Zubirán
• Belimo Aircontrols (USA), Inc.
• F5
• Intel
• Boeki Logistics
• International Rescue Committee
• Brella
• Falabella
• iPS - Powerful People
• Briq.mx
• FEMIA
• IVEMSA
• C&A Mexico
• Finerio
• Jüsto
• Cámara Nórdica de Comercio en México
• Finnu
• Kannbal Consulting
• CANIFARMA
• Fintonic
• Kaspersky
• Cardinal Health
• Ford Mexico
• KIA
• CHG-MERIDIAN MEXICO
• Forte Innovation Consulting
• Kiewit
• CIMMYT
• FrontierView
• Kikoya
• Alegre, Calderón y Márquez Abogados
• ASESARO
• Global Health Intelligence
• HKS Architects
C ompany Att e ndanc e
• Klustera
• Polymath Ventures
• Tecnatom
• Konfío
• Pragmatec
• The Adecco Group
• KPMG
• Prana Power
• The Uncommon Lab
• Lalamove
• Pretmex
• TIBA
• Lana
• Prosegur Security México
• TIP
• Laserline Inc.
• QbD México
• TMF Group
• LAVARTEX
• Quartux
• Tolko Group
• Lavartex
• RAMA MANTENIMIENTO INDUSTRIAL TOTAL
• Top Management Mexico
• Luxottica
• Rappi
• Trebol Capital
• MBE
• Rappi Pay
• Tridi, Manufactura Aditiva
• MEDICE Arzneimittel Pütter
• REFLY
• Truora
• Mergermarket
• RelyOn Nutec
• Truper
• Metabase Q
• RER Energy Group
• TSystems
• Mexico Business
• Rising Farms
• Uala
• Mitsui
• RM Pharma Specialists
• UK Department for International Trade
• Mitsui & Co Power Americas
• Rockwell Automation
• Union de Crédito del Soconusco
• Mobility ADO
• S2G Energy
• U-Storage
• MountX Real Estate Capital
• SAFELINK
• Vaisala
• Mureni
• Salud Facil
• Veeam
• NautechMX
• San Luis Potosi City Council
• Vera & Asociados
• Naviera Integral
• SAP
• Vexi. Tarjeta de Crédito
• Nissan Mexicana
• Sartorius
• Visa
• NLinBusiness
• Scania
• Von Wobeser y Sierra
• nodes.com
• Servicio Geológico Mexicano
• VOPAK
• Northland Power Energia
• Siebtechnik Tema
• VTEX
• Nu México
• Skyhaus
• Walmart
• Nubank
• SocialDiabetes
• Walworth
• Oleum Energy
• Someone Somewhere
• Wartsila
• OLIVARES
• Speyside Group
• Within3
• Ontario Government
• Spinto
• Wizlynx Group
• Oplay Digital
• STORI
• WorldWise Coaching
• OS City
• Stripe
• Yalo
• PAE Global
• Sulmara Mexico
• Yokogawa de México
• Partem Projects
• Swap
• Pearson
• Syneff Consult
• PharmAdvice
• Syngenta
• LENDERA crowdleasing
• TRANSPLACE
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MAY 26 TH , 2021 08:00
NETWORKING SESSION 1 - AI-POWERED 1:1 MEETINGS
08:55
WELCOME ADDRESS
09:00 MEXICO ECONOMIC AND BUSINESS OUTLOOK Speaker: Alejandro Valerio, Associate Practice Leader - Latin America
09:30 IS THE FUTURE OF BUSINESS FEMALE? Moderator: Andrea Villar, Industry analyst at Mexico Business Panelists: Anasofia Sanchez, Head of LatAm at Waze Nazareth Black, CEO of Zacua Elisa Rebolledo, Country Manager México at Casai Brenda Lora, Managing Director at Frontier View Maite Muñiz Telleria, Co-Founder of Truora
10:30
FOSTERING INCLUSIVE ECONOMICS, WHAT COULD IT MEAN FOR GROWTH AND ECONOMIC RECOVERY? Speaker: Ángel García-Lascurain Valero, President of IMEF
11:00 DIGITAL JOURNEY, TREND OR STRATEGY Speaker: Luis Martín Del Campo, Strategist & Senior Director at Genesys
11:20
NETWORKING SESSION 2 - AI-POWERED 1:1 MEETINGS
12:30 MEXICO’S NEARSHORING OPPORTUNITY AS GLOBAL SUPPLY CHAINS SHIFT Moderator: René Espinosa, President of FEMIA Panelists: Jesse Damstra, CEO of Philips México Vladimiro de la Mora, President of General Electric México Héctor Ibarzabal, Managing Director México at FIBRA Prologis Sergio Tagliapietra, President of IVEMSA
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13:15 MANUFACTURING OF THE FUTURE: DIGITAL TRANSFORMATION FOR ALL Moderator: Sebastian Romo, CEO & Co-Founder of Tridi Additive Manufacturing Panelists: Manuel Macedo, CEO & President of Honeywell Latin America Gustavo Zecharies, Regional Vice President Latin America at Rockwell Automation Felipe Villarreal, CEO of Alian Plastics Argenis Bauza, Digital Lighthouse Partner Mexico and Central America at KPMG
14:15
NETWORKING SESSION 3 - AI-POWERED 1:1 MEETINGS
15:00 LOGISTICS AND INFRASTRUCTURE: PILLARS FOR ECONOMIC RECOVERY? Moderator: Héctor González, CEO of SafeLink Panelists: Salvador Rivas, Principal and Director at HKS, Inc Jorge Monzalvo, Customer Experience Director at Maersk Héctor Castellanos, President and Director of Grupo Casgo Carlos Godinez, VP of Sales and Marketing at Transplace
16:00 ENERGY SOURCING: OPPORTUNITY TO CREATE COMPETITIVE ADVANTAGE Moderator: Edmond Grieger, Partner - Head of Energy & Environmental Practice at Von Wobeser Panelists: Ramon Moreno, CEO of Mitsui & Co Power Americas Hans Kohlsdorf, Founding Partner at E2M Energy to Market Ricardo Whaley, Head of Energy Management & Commercial Office at ENEL Green Power Federico Muciño, Founder of EPSCON
17:00
NETWORKING SESSION 4 - AI-POWERED 1:1 MEETINGS
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MAY 27 TH , 2021 08:00
NETWORKING SESSION 1 - AI-POWERED 1:1 MEETINGS
08:55
WELCOME ADDRESS
09:00 CAN MEXICO BE LATIN AMERICA’S FUTURE TECH HUB? Moderator: Courtney McColgan, Founder and CEO of Runa HR Panelists: Fernando Lelo de Larrea H., Partner at ALLVP Javier Mata, CEO & Founder of Yalo Vincent Speranza, Managing Director and Latam Regional Adviser at Endeavor México Francisco Padilla, Co-Founder of Konfio
10:00 THE BATTLE FOR THE FUTURE OF SHOPPING: TRADITIONALS VS. DISRUPTORS Moderator: Roney Almeida, VP of Sales Mexico & Central America at VTEX Panelists: Marco Casarin, Country Manager México at Facebook David Miller, Country Manager México at Amazon Alejandro Sisniega, Chief Commercial Officer & Co-Founder at Jüsto Alejandro Solís, Director General México at Rappi Arturo Vasconcelos, Deputy Director General at Chedraui Cui Arroyo, VP eCommerce Operations at Walmart Mexico
11:15
E-COMMERCE AND SMART LOGISTICS: PRIORITIES FOR TODAY TO THRIVE TOMORROW Moderator: Diego Ysita, CEO of U-Storage Panelists: Christophe Milheres, Managing Director México at Lalamove Iñaqui de la Peña, Country Manager of Dostavista Ivan Ariza, CEO of Cargamos Eduardo Medeiros, Chief Digital Officer at Office Depot México
12:00
NETWORKING SESSION 2 - AI-POWERED 1:1 MEETINGS
12:15 NEOBANKS VS. TRADITIONAL BANKING: FRIENDS OR FOES? Moderator: Iñigo Rumayor Belausteguigoitia, Co-CEO at Arcus Panelists: Aitor Chinchetru, Founder & Co-CEO of Fintonic Cristian Huertas, Country Manager at Bnext Juan Miguel Guerra, Head of Rappipay Mexico at Rappi Emilio González, General Manager Mexico at Nubank Pierpaolo Barbieri, Founder & CEO of Ualá
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13:15 TRENDS AND TRANSFORMATION IN THE PAYMENT TECHNOLOGIES MARKET Moderator: Tory Jackson, Head of Business Development and Strategy - LatAm at Galileo Financial Technologies Panelists: María Teresa Arnal, Head of LatAm at Stripe Héctor Cárdenas, CEO & Co-Founder of Conekta Federico Gómez-Schumacher, VP Sales - LatAm Market at PayPal Miguel Diaz Diaz, General Director of Payment Systems and Market Infrastructures at BANXICO René Salazar Palafox, Director Digital Payments & Financial Services at Walmart México
14:30
NETWORKING SESSION 3 - AI-POWERED 1:1 MEETINGS
15:00 CYBERSECURITY: IS YOUR BUSINESS READY FOR WHAT IS COMING? Moderator: Mario de la Cruz Sarabia, President of Innovation & ICTs Committee at American Chamber of Commerce Mexico Panelists: Felipe García Vivanco, CISO at Scotiabank Claudio Martinelli, Managing Director LatAm of Kaspersky Martin Portillo, CISO at Huawei Technologies México Elvira Sánchez, VP CIO at DHL Express México
16:00 CLOUD CHANGING HOW COMPANIES DO BUSINESS Moderator: Javier Allard, Director General of AMITI Panelists: Maribel Dos Santos, Director General & Senior Vice President at Oracle México Eduardo Gutiérrez, President & CEO of IBM México Angela Gómez, President of SAP México Abelardo Lara, Country Manager at Veeam Software Julio Velázquez, Managing Director of Google Cloud México
17:00
NETWORKING SESSION 4 - AI-POWERED 1:1 MEETINGS
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MAY 28 TH , 2021 08:00
NETWORKING SESSION 1 - AI-POWERED 1:1 MEETINGS
09:10
WELCOME ADDRESS
09:15 THE FUTURE OF WORK Moderator: Jorge Ponga, Partner at Humanologo Consulting Panelists: Liliana Mendez, Area Director Mexico City at WeWork Santiago Gutiérrez, VP México, Central America & Caribbean at Pearson Federico Cerdas, CEO of Global Businesses Inc. Alma Rosa García Puig, CEO at Great Place to Work Francisco José Ruiz Martínez, Knowledge Management Manager at Tecnatom
10:30 DIGITALIZATION VS. HUMAN LABOR Moderator: Selene Diez, CEO & Founder of Forte Innovation Consulting Panelists: Alejandro Preinfalk, President & CEO of Siemens Sergio Torres Lebrija, Strategy & Innovation Head - Digital Banking BBVA Mexico Diego Garza, Sales Director at Intel México Olivier Bouvet, Transformation Experience Officer at MOBILITY ADO
11:15 TALENT STRATEGIES FOR BUSINESS SUCCESS IN 2021 Moderator: Gustavo Linares, Head of Human Resources for the International Rescue Committee and Founder of TalentHow Panelists: Maite Delgadillo, HR Director of Scania Guido van der Zwet,, General Manager of iPS Powerful People Nora Villafuerte, Human Resources Vicepresident at Nestlé Mexico Group Gabriela García, SVP Human Resources at PepsiCo
12:00
NETWORKING SESSION 2 - AI-POWERED 1:1 MEETINGS
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H ighlights VA C C I N AT I O N , E L E C T I O N S : MEXICO’S RECOVERY After a historic economic downturn caused by the COVID-19 pandemic, Mexico is on its path to recovery. The speed at which the country recovers will rely on the government’s vaccination plan, the results of the upcoming elections, and on whether Mexico’s ruling party MORENA gains the absolute majority in the lower chamber of congress, explained Alejandro Valerio, Associate Practice Leader Mexico and Central America at FrontierView, during Mexico Business Forum 2021. Valerio inaugurated the event held on Wednesday, May 26, with an overview of the variables influencing the recovery of Mexico’s economy and the future scenarios the country might face. “Mexico’s economy is undergoing a slow recovery. We should expect it to remain a really attractive economy in the middle and long-term compared not only to Latin America but also to other emerging economies,” said Valerio. Vaccination plays a central role in the path towards recovery. “Mexico has not flattened the COVID-19 death curve. The country has the highest death toll of the region, which has led to a significant economic impact,” said Valerio.
“The sectors linked to the US and Canadian economies, such as automotive and agribusiness, are showing a faster recovery rate than industries relying on the domestic market,” Alejandro Valerio
Associate Practice Leader - Latin America
To date, public figures show that Mexico has vaccinated 8.3 percent of its population. Following that pace, the country should reach 80 percent inoculation sometime during the 1Q2023. Earlier this week MBN reported on Mexico’s path towards herd immunity, described by government officials as reaching immunization
KEYS
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for 75 percent of the population. Moreover, the government released a Diplomatic Management Platform detailing Mexico’s vaccine contracts. The second key variable for Mexico’s recovery is political, explained Valerio. Over 20,000 public positions are elected this year. Morena had a landslide win in 2018 thanks to President Andrés Manuel López Obrador. The question now is: will MORENA regain an absolute majority of more than 333 seats or just a simple majority. MORENA’s key states are Mexico City, State of Mexico and Veracruz but the recent accident on Line 12 of Mexico City’s subway system impacted polls. The lower chamber of Congress is important given that there are several reforms that if approved could send negative signals to investors, said Valerio. Among those are the reform of Banxico’s autonomy, a thorough energy reform, a tax reform and a judicial reform. Valerio also explained that remittances hit a record in 2020 and continued high this year with an accumulated US$10 billion during 1Q2021, an annual increase of 13 percent. However, Mexico’s fiscal stimulus programs to alleviate the effects of the pandemic remained at only 2 percent of the GDP, according to the IMF, leading over 1 million SMEs in the country to close permanently. Scenarios to look forward to include the economic recovery of regions strongly supported by government programs, such as Tabasco and the states involved in the Mayan Train, as well as those states strongly linked to the US economy. “The sectors linked to the US and Canadian economies, such as automotive and agribusiness, are showing a faster recovery rate than industries relying on the domestic market,” said Valerio. As analysts raised their expectations of the growth of the US economy from 5 percent to 6.5 percent, Valerio explains that this move will have a positive influence in Mexico’s economic sectors and regions strongly linked to the US economy.
BOOSTING FEMALE PARTICIPATION IN DIRECTIVE POSITIONS The struggle for gender equality has been raging for decades. As time went by, women’s needs changed and barriers to equality were
gradually broken down. The fight, however, was hampered by the COVID-19 pandemic, which slowed down the growth and career
H ighlights
ambitions of many women. As Mexico moves into a new year and starts to leave the pandemic behind, efforts to achieve gender equality are once again taking center stage in companies’ strategies. During the panel “Is the Future of Business Female?” held on May 26 at Mexico Business Forum 2021, female leaders proposed valuable actions to support companies as they work towards equality. The panel opened up by moderator Andrea Villar, Industry Analyst at Mexico Business. She exposed how workplaces still have a long way to go before women achieve equal access to the same opportunities as men. “Despite women being the majority of the population, only three out of 10 women participate in Mexico’s formal employment sector; however, many women also take on unpaid work at home,” said Nazareth Black, CEO of Zacua. She also pointed out that during the COVID-19 pandemic, seven out of 10 women lost their jobs, which contrasts with current employment figures. Black explained that in order not lose the pre-pandemic gains women made on inclusion “there is a great area of opportunity to support women in leadership positions by creating initiatives and actions that will take advantage of the skilled and talented women that are willing to work in the postpandemic era.” In the post-pandemic recovery, companies could also take a leaf from a startups’ mindset in making equality a priority value, said Elisa Rebolledo, General Manager at Casai Mexico. “(At startups) we look for the best people for
directive positions, regardless of their gender or race. Startups focus on capacity, not prejudices that do not relate to work.” Rebolledo also encouraged companies to wake up and see the actual realities of their employees. “The pandemic was the perfect example of how damaging gender roles are. By remaining home during lockdown, women faced the challenge of taking care of a home due to strict gender roles, which placed a great emotional and productive weight on their daily lives.” To end this, “companies should have in mind that male employees who are married to working women also need flexible times and have equal free time to help at home,” Rebolledo said. Some labor sectors can also be improved in order to foment women’s participation, Maite Muñiz, Co-Founder of Truora, explained. “Software is a sector where women are not predominant; we have to normalize our presence on this sector because women are capable.” Muñiz explained that on the technology sector there is still stigma and gender roles are prevalent, which has kept women away from tech. “Despite women being more demanding with themselves, men are easier to convince to enter the sector; women still put limits on themselves.” Anasofia Sanchez, Head of LatAm at Waze, said that these self-demanding patters become unsustainable for women, especially if companies enforce them. “Unrealistically high expectations on women damage their physical and mental health. Companies must provide necessary support for the demanding positions
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H ighlights that women face at home and work by sharing equal recognition and offering flexible time for their male partners.” Black added that the “Wonder Women figure has been romanticized but society and companies that foment those patterns are taking a mistaken approach.” In that sense, users are also acting as judges of a company’s policies. “To date, we are seeing people choose more ethical or inclusive brands that align with their own values, this is the best way to speak up to impact a company performance,” says Black. She also mentioned that “women should not be ashamed of wanting to be mothers and to have a family. Companies play a big role in allowing them to tie their goals of having successful careers and families.” Companies also have a key role in promoting inhouse training that support women fulfil their directive position goals, said Brenda
Lora, Managing Director of FrontierView. “For the company, it is easier to invest on inhouse talent rather that to look for it outside. This way they can match expectations with reality.” Lora explained that new jobs that demand more analytical, tech and data skills can benefit from inhouse training to promote current employees. This training will also incite diversity on C level positions, said Muñiz, and “open the conversation to new subjects.” She added that inhouse training should have female role models to encourage other women to reach their goals. Lora pointed out that at a global level, companies are taking action and opening up to recruiting women of other cities, not necessarily capital cities or big hubs. “Companies full of men are simply not a reflection of the actual word, it just means they are focusing on one gender, “said Sanchez.
INCLUSIVE ECONOMICS COULD SUPPORT MEXICO’S RECOVERY A year into the pandemic, the Mexican economy is beginning to show recovery signs driven by the reopening of activities and the vaccination process. This growth, however, has not been evenly distributed, said Ángel García-Lascurain Valero, President of the Mexican Institute of Finance Executives (IMEF) on the first day of the Mexico Business Forum 2021 Virtual Edition. “There are areas of the country where the population still does not have access to basic services such as food, housing, health or education. There has been only a marginal improvement and the percentages of inequality are still large,” he noted.
“There are areas of the country where the population still does not have access to basic services such as food, housing, health or education. There has been only a marginal improvement and the percentages of inequality are still large” Ángel García-Lascurain Valero
President of IMEF
In 2Q2020, Mexico’s GDP fell 19 percent compared to the same period in 2019. The GDP was also dragged down by a decrease in investment prior to the pandemic due to the
change of government, said García-Lascurain. According to IMEF, the main factors that generated this decrease were the reduction in private investment, the erosion of the relationship between the public and private sector and the reallocation of public spending to social and infrastructure projects. “The government could not compensate for the fall in investment because of this,” said García-Lascurain. “The country’s decades-long and generations-long effort to build the economy collapsed from one month to the next”. Within the activities that make up the economy, primary activities comprising industries such as agriculture and mining remained relatively constant in growth. Secondary activities comprising services such as restaurants and shops slumped by almost 26 percent, while tertiary activities such as industry fell by 16 percent, he said. Countercyclical measures implemented by countries, such as fiscal support or direct capital transfers to businesses and households, played a key role in lessening the impact of the pandemic, said García-Lascurain. In 2020, almost 18 percent of the UK’s economy consisted of resources that its government injected into businesses and households. France injected 15 percent and Germany 14 percent. While Latin American countries such as Brazil injected 4 percent into their economy, “in Mexico we did
H ighlights not have that support. There were not enough measures to preserve jobs, support the liquidity of companies and support families’ consumption habits,” he said. During the past few months, some private investment has been recovered, García-Lascurain said. “However, we are not yet at pre-pandemic levels. Investment continues to shrink despite the resumption of activities,” he explained. “Private investment is the main driver of employment generation, as more than 80 percent of jobs in Mexico depend on businesses.” He added that as investment shrinks, the impact is noticeable on the well-being of many families. However, industrial activity has shown signs of recovery but this is mainly thanks to exports. “The Mexican economy is recovering to a large extent because of the growth that the US is experiencing, mainly due to the support injected
into its economy and the new support programs of US President Joe Biden’s government.” According to García-Lascurain, the current levels of consumption north of the border have not been seen since the post-war period after WWII and this is a great boost for Mexican companies that export. Mexico’s exports fell to US$18 billion because of the pandemic but by March 2021 they had doubled, he said. In Mexico, consumption in February was still below the levels recorded in the same period in 2020, before the pandemic hit the country. “This shows the severe impact of the recession,” García-Lascurain pointed out. In 2020, more than 1 million businesses closed for good, while 13 million people were out of work. According to García-Lascurain, the industries that do not depend on foreign trade have not yet managed to recover.
R E V E N U E , P R O F I TA B I L I T Y, C O S T- R E D U C T I O N : G O A L S O F DIGITAL JOURNEYS The digital journey should target three key aspects in every company: growing revenue, increasing profitability and reducing costs. Otherwise, digitalization might just be a costly solution that does not solve any problems, said Luis Martin Del Campo, Strategist and Senior Director at Genesys, during Mexico Business Forum 2021.
us to jump on a trend rather than designing an effective business strategy,” says Del Campo.
During the presentation, the leader of Genesys pointed out that an effective business strategy should follow “a clear path that impacts these three basic business metrics.” Otherwise, the digital journey “will quickly become a solution in search of a problem and eventually fail.” Addressing these three key variables can take many shapes. For instance, revenue growth could mean more customers or more sales. Increased profitability could be mean innovation or specialization, while efficiency will ultimately drive cost reduction.
“To offer the customer all possible channels is the way to go. Depending on his or her situation customers may select one channel over another at a specific moment. Rather than prioritizing one, we can use all so the customer decides which is the experience they want to enjoy”
Companies may be following misleading incentives in their digital journey, said Del Campo. Often, business leaders decide to increase digitalization because they assume it is what customers need or because their competitors are doing it. After the pandemic, digitalization might have been perceived as a matter of survival. “These ideas may be leading
The first step for a successful digital journey is to be customer-focused. “To elaborate a successful digital journey, we should depart from placing the customer at the center of the strategy.”
Luis Martín del Campo
Strategist & Senior Director at Genesys
Not one single channel alone is effective; to build an effective customer experience, an omnichannel strategy is essential. “To offer the customer all possible channels is the way to go. Depending on his or her situation customers may select one channel over another at a specific moment. Rather than prioritizing one, we can use all so the customer decides which is the experience they want to enjoy,” he mentioned.
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H ighlights Elements and tools that helped companies remain close to their customers in its digital journey include chatbots that provide an immediate and enjoyable experience to
customers and predictive models, which can also become important differentiators from competitors.
N E A R S H O R I N G O P P O R T U N ITI E S A B O U N D A S G LO BA L S U P P LY CHAINS SHIFT Recent events are making the importance of strategic geographical hubs more apparent to numerous companies. The US-China trade war, the pandemic and later the blockade of the Suez Canal raised awareness about the importance of having facilities in Mexico to attend to the needs of the North American market. To help the country become a reliable business partner, experts from several productive industries met on Mexico Business Forum 2021 Virtual Edition to discuss strategies to strengthen exports and attract investment. During the panel “Mexico’s Nearshoring Opportunity as Global Supply Chains Shift” held on May 26, speakers addressed Mexico’s strengthens a global business partner. “The country is one of the most important business partners for the US, which is our largest export destination and with whom we have a newly renewed FTA that has propelled local growth by 30 percent,” said Vladimiro de la Mora, President of General Electric México. Mexico’s strongest assets to become a global business partner are its legal certainty, security, manufacturing capacity and a competitive energy sector, according to De la Mora. However, the country still has to
invest on talent. While Mexico has one of the highest rates of engineering graduates, they are not using their full potential because there are few opportunities for them to specialize, said de la Mora. “Companies should ally with universities and governments to make a positive shift that will result on a virtuous circle for employment, investment and specialized services.” The US’s effective vaccination rollout can further help Mexico increase its attractiveness as a business partner, said Sergio Tagliapietra, President of IVEMSA. “(The US’) economic activation will inevitably reflect on Mexico due to our importance. It can also make other countries notice Mexico’s geographic position and excellent human capital and stablish here,” said Tagliapietra. However, he explained that companies should not only look at a country’s geographical location; businesses should search for the country that offers them the right support and services. “Rightshoring,” Tagliapietra explained, consists of a “process to identify the best location for manufacturing, IT or business processes so a company can achieve faster delivery.” This trend can help Mexico and reduce the world’s supply dependence on China.
H ighlights “The pandemic reset supply chains and exposed this large dependence on China,” agreed Jesse Damstra, CEO of Philips México. Damstra explained that Mexico is an attractive partner but to get rid of doubts, the country needs to become more business friendly. “It is important to begin to attract foreign investment, stablish exchange rates policies, develop stricter and consistent rules on how to do business to become future-ready manufacturers that go beyond production and have the adaptable factories that companies demand.” Constant education on trends such as digitalization will help local companies adopt them, added Damstra. These internal changes will also permeate to the rest of the country as companies innovate their products and services so customers have access to better solutions. Infrastructure investments, however, are also necessary before more companies come into the country. “Mexico lacks electric infrastructure so some industrial plants have to work with emergency plants, which pollute more,” said Héctor Ibarzabal, Managing Director México at FIBRA Prologis. Mexico’s clean energies must be accessible to companies, added Ibarzabal, but to do so the federal government has to be aligned with this vision. Mexico should also identify its strongest areas of expertise to attract investment. “National development
is an opportunity to understand local supply challenges and meet international ones,” said René Espinosa, President of FEMIA. “Mexico has yet to understand that it is on an international race, where opportunities can be taken by other countries,” said Tagliapietra. Ibarzabal agreed and pointed that South Korea and Chile are potentially attractive partners for Mexico but if the country fails to offer fair conditions, they can find other hubs. “Asian companies are not used to global operations so they ask for different things, which is another challenge for Mexico,” said Ibarzabal. Espinosa observed that “Asia Pacific, Morocco and Eastern Europe are giving certainty and guaranteeing investment in tech to boost manufacturing; they are Mexico’s strongest competitors.” Considering these challenges, what actions is Mexico’s taking to enhance nearshoring? “Pandemic containment and vaccine rollout,” said Damstra. “Unfortunately, the private sector cannot intervene in vaccine rollout,” as vaccines for emergency use are impossible to acquire for companies, added Damstra. However, the US FDA is already exploring working with the private sector based on the industries’ interest and the pressure to get vaccines.
DIGITALIZATION IS A MINDSET: EXPERTS Digitalization in the industrial world is not as simple as in other businesses, as it also requires a strong organizational commitment and culture shift, agreed experts during Mexico Business Forum 2021 Virtual Edition held on May 26. Tridi Additive Manufacturing, Honeywell Latin America, Rockwell Automation, KPMG and Alian Plastics addressed the elements surrounding a successful digital transformation strategy for manufacturing companies.
Zecharies, Regional Vice President of Latin America at Rockwell Automation. Manuel Macedo, CEO & President of Honeywell Latin America, agreed and stated that “The pandemic tested our adaptability skills and how quickly we embrace change. It also brought us unexpected benefits as it prompted innovation and technology adoption, which have greatly influenced operations continuity across different sectors. Digital transformation far from a trend is a need.”
Digitalization is Not a Trend but a Need
Argenis Bauza, Digital Lighthouse Partner Mexico and Central America at KPMG, highlighted that digitalization trends were already happening before the pandemic. Companies acted very differently on the onset of digitalization. Some fully reset their business models, while others recovered at different speeds. However, e-commerce platforms were the big winners.
“Different studies showed that the pandemic accelerated the adoption of digital technologies globally. In the industrial sector, project implementation and production supervision benefit from these technologies,” said Gustavo
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H ighlights Alian Plastics, a manufacturing company that incorporated Industry 4.0 principles into its operations, said that digitalization drove it to seek strategic partnerships and level up existing goals. “Digitalization offers a competitive advantage for organizations across different sectors given the specific needs of each niche,” said its CEO, Felipe Villareal.
Dos and Do nots of Digital Transformation at Manufacturing Facilities There is not a single digitalization strategy as experts agreed that digital transformation can incorporate different conceptions for different business models, sectors and even within a company’s internal departments. “Digital transformation is not an easy process to endure. For some, digital transformation might imply being paperless or cashless. Others can understand it as a data-driven transformation while, for some it would only mean remote work,” said Sebastian Romo, CEO & Co-Founder of Tridi Additive Manufacturing. Digital transformation also involves a fundamental organizational shift that goes beyond technology, industry leaders agreed. “Some key areas of a digitalization strategy are as simple as organization structure. The lack of common operation goals might delay digitalization. Advanced companies talk about technology as a whole, rather than separate technologies,” says Rockwell. KPMG agreed:
“Digital transformation is pushed by business challenges that need to be solved. Digital transformation is a business transformation that is based on digital tools.” From the experience of a manufacturing company enduring the digital transformation process, the cultural shift is the most important challenge. “Organizational culture is the first challenge to overcome. Leaders need to sell the digital transformation idea to their collaborators through clear objectives. If a person used to write down production reports now is asked to use digital tools, it implies a cultural shift. Clear objectives are then essential,” said Villareal.
Important Elements Surrounding Digital Transformation As in other business strategies, the customer should remain at the center of a company’s digitalization plans. “A comprehensive digitalization strategy only makes sense when it places the needs of the customers first,” said Honeywell’s Macedo. “Digital transformation is about how to deliver more value to our customers,” agreed Tridi’s Romo. Additive manufacturing is a development that can strongly advance greater levels of digitalization. Bauza explains that for a manufacturing company there are four types of influx: material, information, cash and relationships. “In Latin America we are focused on material flux but information flux remains important not only
H ighlights
in the form of market intelligence but also in new technologies. An information flux can imply sending the file of a spare part to be printed at our customers facilities in a remote location,” said Bauza.” Tridi, a Mexican company specialized in 3D printing, had previously discussed the benefits of additive manufacturing across different manufacturing sectors with MBN. There are, however, some sectors that are prime candidates for this technology, explained Romo. “Overall, this technology would be most beneficial for companies in the aerospace and heavy-vehicle markets that work with small production volumes, substituting molds for direct manufacturing especially in rapidly changing or highly customable environments,” said Romo to MBN. Creativity and talent remain important aspects of a digital transformation strategy. “Talent and productivity go hand in hand. In Latin America there is still a productivity gap and it
is important that both the public and the private sectors come together to fill it,” said Macedo. Rockwell’s Zecharies agreed and stated that “When incorporating new talent, we should look for minds that are digital-transformation oriented.” Without a doubt, new generations should bring creativity and a change-oriented mind, said Bauza. “I’m surprised about how new generations have a mindset prompt toward the digital transformation. We need the right people and talent,” said Bauza. Overall, there is no question that digital transformation can bring success for a company when properly conducted. “Digital transformation starts with a cultural shift. Our experience has been to use digital tools to innovate our business model and create a more robust company that can serve a diverse customer portfolio from the toy sector to the light vehicle manufacturing,” said Felipe Villareal.
LOGISTICS, INFRASTRUCTURE ESSENTIAL TO ECONOMIC RECOVERY The promotion, development and investment in infrastructure and logistics projects represent an opportunity for economic recovery in Mexico. The country could also greatly benefit
from trends such as nearshoring, e-commerce and the pipeline of projects in the north and southeast, agreed panelists during the Mexico Business Forum 2021 Virtual Edition, held on
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H ighlights Wednesday, May 26. “We are at a time when the need for transformation and decentralization is being recognized,” said Hector Gonzalez, CEO of SafeLink and moderator of the panel. Th e cu rre nt a d m in is tratio n’s fl a g sh ip infrastructure projects, such as the Mayan Train and the Dos Bocas refinery, have taken the spotlight in recent years. However, projects that were on hold for decades have also been dusted off such as the interoceanic corridor (also known as the Tehuantepec isthmus rail corridor) connecting Oaxaca and Veracruz, González added. This project could be inaugurated by the end of 2023. “In addition to seeking logistical solutions in the region and more efficient energy supply, the corridor also projects a spill-over of benefits for real estate development and the quality of life in one of the poorest regions of the country,” he added. The region’s attractiveness has increased considerably and, by the end of 2020 alone, the Yucatan government announced a private investment of over MX$4.5 billion (US$226 million) in real estate and tourism. Despite these achievements, certainty is still a pending issue in the country, added Carlos Godinez, VP of Sales and Marketing of Transplace. “As investors, we are looking for certainty. The rule of law and a legal framework are essential for more investment to come in and accelerate economic recovery and job creation. It is necessary that what is established is respected by all parties,” he said. According to Godinez, the logistics sector has seen a significant recovery mainly in Nuevo Leon and Jalisco, which is a good sign for sectors such as automotive, electricity and consumer goods. As a result of the pandemic, “companies became conservative and stopped ordering goods from their suppliers in Asia or Europe,” said Customer Experience Director of Maersk, Jorge Monzalvo. The adjustment in demand and consumption and the uncertainty generated during 2Q2020 due to the imposition of lockdowns made companies more fiscally conservative, explained Monzalvo.
“If there is one region of the country that lacks infrastructure, it is the southeast. It is needed more than ever to allow better communication and be more competitive” Carlos Godinez
VP of Sales and Marketing at Transplace
On the other hand, people in isolation stopped spending on services such as restaurants and started spending on consumption, which generated a reactivation in demand and highlighted the need for transport. This led industries to look for strategies to boost their supply chains. “One component they relied on to do this was real estate infrastructure to store their products in warehouses close to ports or to their factories,” Monzalvo said. “This triggered a particular dynamic that will help determine how real estate investments should be diverted going forward.” Monzalvo also mentioned that the e-commerce boom generated by the pandemic triggered companies to ask themselves whether to invest in combined warehouse strategies (wholesale and retail) or separate sets of warehousing in order to serve their customers with a more efficient approach. In this regard, Salvador Rivas, Principal and Director of international design firm HKS, said that one of the projects they have been working on the most in Mexico is the hospitality and sports sector. “Those were sectors that initially had a certain slowdown but we have seen an upturn lately. There is a lot of interest from investors in future planning,” Rivas said. “It is important to take these initiatives and not wait for things to happen. An important part of the sector’s recovery is innovation as we adapt to the changes that have taken place.” One of these changes, remarked Héctor González, has been the trend sparked by remote working as people now consider investing in out-of-town property for living and not just holidaying.
Southeast Mexico, Catalyst for Economic Recovery? Infrastructure development in the southeast of the country has been a pending task throughout Mexico’s history, said Godinez. “If there is one region of the country that lacks infrastructure, it is the southeast. It is needed more than ever to allow better communication and be more competitive,” he added. Likewise, Maersk’s Monzalvo said that as Mexicans “it is our duty to ensure that there is even growth in the country.” Monzalvo explains that those efforts must go beyond developing infrastructure plans, as they should involve long-term planning that considers education and complimentary services to attract and retain investment.
H ighlights For HKS’s Rivas, one of the main keys to boosting this region is diversification. “Currently the Riviera Maya is completely focused on tourism development. An opposite example is Merida, Yucatan, which has attracted many businessmen from the center of the country to live or develop different projects. This means that it is not so dependent on a single activity and when another crisis like the one we are experiencing arrives, the impact will be minor,” he pointed out. During this crisis, the private sector in Mexico has shown its strength, said President and Director of Grupo Casgo Héctor Castellanos. “Today 90 percent of the investment in Mexico’s
construction industry comes from the private sector,” he said. “This is reflected in the socalled micro-economies of the southeast where we have not stopped building so vertical construction continues at an accelerated pace.” According to Castellanos, the cancellation of Mexico’s New International Airport (NAIM), has given opportunities to other airport groups in Cancun and Guadalajara to become attractive targets for private investment. “It would be really important for public investment to continue to bet on growth because a lot of the rail, road and port infrastructure has to be driven by them. The reality is that in the last three years, public sector participation has been absent”.
E N E RGY S O U RC I N G : O P P O R T U N IT Y TO C R E ATE CO M P E TITIV E ADVANTAGES The promotion and use of renewable energies in companies’ supply chains have picked up steam in recent years. With President Joe Biden’s appointment, the US made its environmental agenda a priority and as its main trading partner, Mexico faces a challenging outlook if it is to maintain and increase its attractiveness for foreign investment. During Mexico Business Forum 2021 Virtual Edition held on May 26, experts of the energy industry met in the panel “Energy Sourcing: Opportunity to Create Competitive Advantage” to discuss the electric reform, climate change and clean energy sourcing.
Energy sourcing on 2021 is resting on hybrid schemes, which are a proactive way to begin the transition to clean energies, explained moderator Edmond Grieger, Partner, Head of Energy & Environmental Practice at Von Wobeser. This is the case especially during an uncertain scenario, such as the one Mexico finds itself in. Ricardo Whaley, Head of Energy Management & Commercial Office at ENEL Green Power, highlighted that demand for clean energies is indeed increasing, “renewable energies are the most cost-effective globally and in Mexico. They offer prices optimization coupled with an added value in cleaner energy consumption,
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H ighlights which is a growing in preference among users.” However, Whaly explained that for companies to fully transition into green energies, price plays a large role as it remains among a company’s key motivations. At a macrolevel, there is another factor influencing companies’ decision to transition: the recently proposed electric reform. Federico Muciño, Founder of EPSCON, explained that “consumers are affected by feelings of uncertainty, goaded by regulatory changes in the energy sector. There was rampant speculation about a return to the pre-2014 Energy Reform landscape, where CFE had a monopoly on energy supply. Companies reacted by delaying investments and, instead, focused on cost-saving.” Ramon Moreno, CEO of Mitsui & Co. Power America, said this reform has been a risk for contracts and for sustainability in Mexico. However, “Mexico’s electric market is not being threatened by that; we can still get advantages with the new reforms,” said Moreno. Media’s speculation enhanced the worry of the final consumer but Mexico’s electric market remains strong and sufficient, he added. “The countries’ clean energies offer the right option for positive transitions that fight climate change,” said Moreno. Once companies have decided on clean energies, there different points to consider depending on their specific needs. “The consumer always wants quality and continuity, with low costs that will not rise,” explains Moreno, “this is a
trilemma because it seems like every aspect goes its own different way and they are hard to tie together, however, technology is key to all these aspects.” Technology can help companies match regulations and consumer’s needs to create a suited solution. “Digitalization rises competitiveness and lowers costs because automation has replaced people at some job positions.” “Every solution depends on the costumer,” said Muciño, “some need solar panels for their home, others need the efficacy brought by thermal plants; projects vary and so does the energy source.” According to Muciño, for on-site generation processes sites need to be studied from a multidisciplinary point of view, checking facilities, gas supplies, boilers, steam and water pressure. Hans Kohlsdorf, Founding Partner at E2M Energy to Market, mentioned that there are good opportunities for the private sector to enter renewable energy. He highlighted that this the time for qualified users to decide if they want to participate in the energy market as the current environment “allows for multiple generators willing to put together solutions for industrial customers.” To promote customers incorporating energy sustainable sources, people need to part from the belief that “they depend on CFE for energy. In the electricity market, it does not matter
H ighlights who bills, the energy network continues to flow.” Kohlsdorf also explained that the quality of energy received does not depend the seller but on the facilitator who optimizes it. Mexico’s power quality is not good, said Kohlsdorf, so the private sector assumes that it will require power plants and other regulators to ensure efficiency. To reduce uncertainty for consumers who want safe energy, Whaley explained that a key aspect is the “geographic diversification of the energy sources used to supply. Some areas have shortcomings, while efficient ones can reduce costs.” As the country moves towards cleaner energy sources, the sector has to strengthen its transmission networks to make consumption more efficient, added Whaley. Moreno urged listers to set aside concerns about regulatory changes, “they do have an effect but we need to think about the shortand medium-term problems such as climate change.” Climate chance is more worrisome than the reform and much timelier to address, explained Moreno. “It is a challenge but it is not impossible; we must diversify energy sources,
make more efficient use of it and act better to fight climate change,” said Moreno. To end these excessive concerns, Muciño urged for more education and “understanding of the regulation and commercial practices.” Prices are also important. Kohlsdorf also asked listeners to let go of their extreme fear of the electric reform, which “also brought good things like the increase of capacities of industrial zones, in which internal problems are fixed locally and not directly by CFE.” Kohlsdorf added that to reduce uncertainty, companies can contract on-site energy, diversify their sources and digitalize their intake. “Companies that speculated during the first months on the reform got bad contracts and brought themselves severe problems.” The private sector of the energy industry is working to get power generation get closer to the user, added Kohlsdorf. This way there will no longer be remote plants, as new ones will only be present in areas where it makes sense to put power generators. “We can also help the government make sensible regulatory changes that foment savings and optimize consumption.”
MEXICO SHOWS PROMISE TO BECOME LATIN AMERICA’S TECH HUB Latin America’s entrepreneurs are on fire. Mexico is already home to two unicorns and keeps attracting both local and foreign investment funds. While opportunities for entrepreneurship keep increasing, it is key to address the region’s remaining challenges to help startups have a greater impact, agreed panelists during the second day of Mexico Business Forum 2021 Virtual Edition. “It is most impressive that Mexico has achieved all this success in the midst of a pandemic and a global financial crisis. If this is bad, I cannot wait for it to be good”, said Courtney McColgan, Founder and CEO of Runa HR and moderator of the panel. Getting to this point was not quick or easy. According to Francisco Padilla, Co-Founder of Konfio, the journey started almost 30 years ago with NAFTA, a treaty that opened the borders to trade with the US. “This led to the migration of talent to the US who trained there and returned after a few years, creating a partnership between both countries that at the end of the day has brought us closer to more advanced places like Silicon Valley.” Padilla added that this, coupled
with globalization, has led to talent, capital raising and opportunities in the region. “Getting to where we are now is a process that has been compounded over many years. It is the joint effort of many people with a longterm vision,” added Fernando Lelo de Larrea H., Partner at ALLVP. He also mentioned that it is important not to get lost in the ecosystem’s hype as investment rounds are announced more and more frequently. “This is a game with a longterm vision. We have to remember that we are creating value and transforming lives in the long term through better companies. What is exciting today is not just a round announcement, it is
“Those who know how to see a value proposition in another market and replicate it are to be celebrated. It is not easy” Vincent Speranza
Managing Director and Latam Regional Adviser at Endeavor México
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H ighlights that we are succeeding in creating products and services that transform lives and bring better solutions to market,” he noted. For Javier Mata, CEO and Founder of Yalo, which recently raised US$50 million, another reason why Mexico and Latin America are experiencing the current boom is that the region “imagines a future that does not depend on legacy technologies.” Mata said the lack of digital infrastructure is the region’s biggest opportunity and investors are noticing. “They are starting to notice that innovating here can be done faster and the changes that can be achieved are going to have an impact on the whole world,” he pointed out. In agreement, Vincent Speranza, Managing Director and Latam Regional Adviser at Endeavor Mexico, said that the current state of the entrepreneurial ecosystem is not a work of magic. To understand the present it is important to remember the first decade of the 2000s, explained Speranza, when Mexico’s entrepreneurial ecosystem was only focused on retail, food and beverages and family businesses, with no public policy, little participation of women and no technology. “This became a great opportunity because we needed to close the gap that was created in that period,” he said. One of the first milestones of the region’s ecosystem was the first round of capital that exceeded US$100 million, made by the Mexican fintech startup Clip in 2019 and led by Softbank, explained Speranza. “This made
international funds look at Mexico for the first time. This was a validation of the value of the market in the country and opened a window for others,” he said. Later, Kavak would become the first Mexican unicorn after reaching a valuation of US$1.15 billion in its latest funding round last month. The SoftBank-backed used-car buying and selling platform has raised more than US$400 million in total since its founding in 2016. In early May, Bitso raised US$250 million in a Series C investment, bringing its valuation to US$2.2 billion to become the first crypto unicorn in Latin America. “The growth of the cryptocurrency ecosystem this year has been remarkable. It took Bitso six years to reach its first million customers. Now - less than 10 months later we have reached two million,” said Daniel Vogel, Co-Founder and CEO of Bitso, in a statement. Back in 2017, Vogel told MBN that during 2014 the number of bitcoin transactions Bitso saw on a good month amounted to MX$4 million. By 2020, the platform processed more than US$1.2 billion in international payments, including remittances and payments between companies. Bitso, which successfully replicated part of USbased platform Coinbase’s business model, is an example of how projects that have been successful in Silicon Valley can find their way in Latin America. But, according to Endeavor’s Vincent Speranza, entrepreneurs who replicate foreign models in the region have been heavily penalized. “Those who know how to see a value
H ighlights proposition in another market and replicate it are to be celebrated. It is not easy,” he said. “I think the next big move will be to look at
solutions that are transforming other markets such as South East Asia”.
TRADITIONAL VS. DISRUPTOR: THE BATTLE FOR THE FUTURE OF SHOPPING While digital companies ponder the next step to increase their market share, traditional supermarkets want to get customers to visit their online shops. The balance between the physical and digital experience is key to engaging consumers, agreed experts at Mexico Business Forum 2021 Virtual Edition held on May 27. During the panel “The Battle for the Future of Shopping: Traditionals vs. Disruptors,” e-commerce and traditional retail leaders discussed consumer habits shifts and how to build a hybrid future that focuses on fulfilling and exceeding consumer’s expectations on supermarket shopping. The pandemic made online shopping a staple for many Mexicans and e-commerce keeps growing by leaps and bounds. In 2020 alone, the supermarket category in e-commerce grew by 40 percent, reports the Mexican Association of Online Sales (AMVO), while e-commerce as a whole increased by a whopping 85 percent during 2020, said Roney Almeida, VP of Sales Mexico & Central America at VTEX. These circumstances pushed “business leaders to create agile strategies to transform their retail offer,” said Almeida.
“2020 was a complex year,” explained Arturo Vasconcelos, Deputy Director General at Chedraui. “The changes surrounding purchase dynamics detonated shifts our operations as many of our clients radically changed their consuming habits.” Vasconcelos explained that Chedraui had to strengthen its digital offer to respond to the shift and stay relevant during the digital transformation. “This year, however, consumers will also adapt habits. We have understood these changes and are trying to build an ecosystem with our commercial partners to continue enhancing Chedraui’s value offer,” said Vasconcelos. Digitalization needs to perfectly meet the costumer’s expectations, he added, which is what happens at in-person shopping. Alejandro Solís, Director General México at Rappi, reiterated that “e-commerce retailers need to stay relevant and keep adding value to their offer”. To do so, Rappi is investing in customer service and developing predictive models that will allow the company to identify and understand clients’ bad experiences, even if they decline to share them with the company. “We are analyzing data to improve the company’s sales and efficiency,” said Solís and highlighted that online grocery shopping is all
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H ighlights about good quality pictures, smooth payment transactions, clear product description and fast delivery times. Consumers still prefer to have direct, physical contact with the product they buy, explained Alejandro Sisniega, Chief Commercial Officer & Co-Founder at Jüsto. In grocery shopping, he explained, it is essential to have an excellent offer that meets clients’ expectations and generates the same emotions that having physical contact with the products would create. “One of the first problems we had is keeping (consumers) in contact with the product. This is why choose to create a complete costumer experience for products such as fruits and veggies. Spaces have been one of our greatest challenges as compared to big supermarket chains, ours are very limited. However, this does not affect product variety.”
“We need to stay curious and experiment, fear of failure is what keeps us conservative. We need to try new thigs to really disrupt the market.” Marco Casarin
Country Manager México at Facebook
A broad variety of products is also essential to attract and retain customers, said David Miller, Country Manager México at Amazon. Through a wide variety of products, customers are more likely to find something that meets their needs. “It all begins with the product selection. We at
Amazon offer over 50 million products,” said Miller. Moreover, online retailers should also prioritize fast delivery, he added. “People’s expectations circle around fast delivery, which is something we continuously improve.” “Low prices are the ultimate goal for retailers, online and in-person,” said Cui Arroyo, VP eCommerce Operations at Walmart Mexico. “Price competitiveness is the core of our offer and the base of our approach with commercial partners.” During 2020 and 2021, Walmart Mexico evolved from traditional retail into an omnichannel provider. While it seems that the companies are the ones driving change, that has not been necessarily the case. “(Companies) are not the ones propelling the change, we are moving alongside clients’ preferences,” said Arroyo. “This period is not a new normal; it is a transition,” added Marco Casarin, Country Manager México at Facebook. Companies are still adapting to the consumer habits, he highlighted, and they have discovered that tech allows them to monetize of products, services and experiences to deliver more innovation than traditional companies. “Digitalization is a need, not a choice. In 2020, sales from Mexican SMEs shrank by 48 percent but 36 percent of them stablished an online presence.” About 88 percent of these SMEs choose Facebook to begin selling online, he said, while the rest chose Instagram or WhatsApp. Moreover, 74 percent of these companies did not use tech experts to begin this journey “Facebook is democratizing tech access and
H ighlights allowing companies to survive by consolidating their digital offer.” “Markets have their moments; people used to prioritizing price, comfort and convenience but today they prioritize comfort and convenience over price,” said Almeida. To find what the consumer will want next, companies could use data analytics, explained Vasconcelos. Through data analytics, companies can generate strategies that focus on the medium and longterm issue, while they fulfill big picture goals through adaptability and respond to lifestyle changes. Data analytics will drive the ecosystem to evolve and develop other concepts like social commerce and community buying, agreed
Sisniega. “By assessing the power of data, we can register the interaction and translate it into better experiences,” Sisniega concluded. Studying and learning will make the difference ultimately, said Arroyo. “We need to stay curious and experiment, fear of failure is what keeps us conservative. We need to try new thigs to really disrupt the market.” To grow and build brand loyalty, companies should seek excellence in critical purchasing factors, integrate new experiences in a hybrid world, employ their natural ability to create communities, enrich hybrid purchasing with high innovation and permanently innovate, explained Casarin.
L A S T- M I L E D E L I V E R I E S A R E C U S T O M E R - C E N T R I C , D ATA DRIVEN: EXPERTS Addressing the needs of B2B and B2C customers and focusing on data-driven improvement and on the country’s e-commerce trends, were among the central topics experts addressed during Mexico Business Forum 2021 Virtual Edition. In the panel “E-Commerce and Smart Logistics: Priorities for Today to Thrive Tomorrow,” last-mile logistic players and retailers agreed on the potential the country has for e-commerce and what it will bring to Mexico. “We saw e-commerce grown about 80 percent in Mexico. But to put this number in perspective it is necessary to consider that when in Mexico 2 billion deliveries are made, 17 billion are made in the US and 70 billion in China,” said Iván Ariza, CEO of Cargamos.
Customer First Last-mile delivery players have a mission to meet the expectations of e-commerce platforms so the end-customer’s experience can be as smooth as possible. To do so, communication is essential. “Communication between logistics and e-commerce players remains key. Different customers have different priorities. Some want to deliver cheaper, others faster and others both. Communication is necessary to bring the experience for the end-customer to the next level,” said Christophe Milheres, Managing Director Mexico at LalaMove. Eduardo Medeiros, Chief Digital Officer at Office Depot Mexico agreed: “For the end-customer it is not about
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H ighlights the logistic companies; it is about the company that he’s buying from,” he said. Experts agree on the importance of selecting the right logistic partner. “The assignment of the last-mile delivery is one of the most important elements to offer the end-customer a good experience,” said Iñaqui de la Peña, Country Manager of Dostavista. “If we provide ondemand pick-up for same-day deliveries, we are placing orders in route to generate a good experience. This strengthens the relationship between the logistics service and the customer. The relationships that we build with each location is important so that we can offer the end-customer a successful delivery,” he said. Building a close relationship is also important for Cargamos. “Logistics is really wide and we are taking a last-mile delivery approach. We need to understand what would be the best relationship and for whom,” said Ariza. Experts agreed that the emergence of last-mile delivery companies created a pool of potential partners that large e-commerce players will have to choose from.
“The assignment of the last-mile delivery is one of the most important elements to offer the end-customer a good experience” Iñaqui de la Peña
Country Manager of Dostavista
For Office Depot, one of the largest retailers of office products in Mexico, “the logistic partner is the one who sets the goal,” said Medeiros. He explained that all the logistic partners need to have not only the delivery capacity, but the quality the end-customer expects. Thus, mutual commitment is important. “We need to create trust in our logistic partner,” he said.
Integration between logistics providers and e-commerce platforms is essential for the different aspects of a business. “We need to do teamwork because far from just being logistics suppliers we are the technology partner that can help improve overall processes. There is a need to map all kinds of processes. Many times, logistics is not about fast delivery but about delivering at the right moment,” says de la Peña. In this regard, even emerging business niches such as self-storage play an important role. “We democratize the storage space so that different users can take advantage of it and play against larger players,” said Diego Ysita, CEO of U-Storage, the country’s leading selfstorage company.
The Challenge of the Return Process As e-commerce sales bloomed, product returns also increased and technological integration can help in this regard. “In Mexico, return processes are important for customer satisfaction and we need to continue working on them. There are companies that are working more and more on integration strategies and omnichannel has proven to be effective,” says Milheres, who also stated that a unified policy across different channels can be challenging but necessary. de la Peña agrees: “Product returns can be complicated, as the customers aim to want to return the product quickly and they receive little help in this regard. In some cases, we have over 8-9 percent returned products. Companies need to focus on the customer experience without forgetting that fast delivery is not all that customer cares about,” he says. “Returns are the most important parts of e-commerce and they give many headaches. The omnichannel world can facilitate this and help them choose the best option,” said Medeiros.
Mexico’s Potential Technological Integration: First Step in Building Long-Term relationship. To achieve this thrust, it is necessary to first establish a robust integration with clear processes,” said Medeiros. “With this, we can have a clear idea on how we can use our resources better. For instance, at some moments during the pandemic, we delivered some products in less than an hour.”
“Even if all last-mile delivery logistic companies got together, it would be difficult to cover the upcoming demand trends that we are seeing,” said Ariza. SMEs will gain more relevance in the future, agreed experts, as a large pool of last-mile delivery companies and social networks are not only democratizing the access to e-commerce but allowing smaller players to offer an optimal customer experience.
H ighlights
THE FINTECH REVOLUTION IN MEXICO IS ONLY JUST BEGINNING As one of the least banked populations in Latin America, Mexico has attracted the attention of neobanks, which have come into the country to challenge traditional banking. In 2019 alone, more than 394 fintechs were registered in Mexico and this number grew to 441 in 2020, according to Fintech Mexico. In addition, last year the five main Latin American markets received a total of US$8 billion in financing for fintechs, of which Mexico attracted US$1.3 billion. As more competitors enter the market, the opportunity to reach those underserved by the financial system has increased but getting there will not be possible without a customer-centric strategy and a long-term vision, agreed panelists on the second day of the Mexico Business Forum 2021 Virtual Edition. “A few years ago, traditional banks dominated the sector. Today it is clear that fintech is a strong player and is here to stay,” said Iñigo Rumayor Belausteguigoitia, CoCEO at Arcus. Greater internet access, regulation and the opening of digital accounts are some of the factors that have boosted the fintech ecosystem in Mexico, said Cristian Huertas, Country Manager at Bnext. “Also the traction that companies like Rappi or Nubank have generated in Latin America has helped other players in the region to continue raising capital,” he said. “Companies from other countries have arrived because traditional banks have not fulfilled their
task here. That is why we have grown as we have done so far.” Brazilian fintech Nubank, which now has over 35 million customers worldwide, approached the Mexican market in 2019 after discovering that many of the elements that made its product a success in its home country were also present in this region. “Mexico is a very profitable region where no new players have been able to enter. It has a population of more than 127 million and a giant economy of more than US$1 trillion,” said Emilio González, General Manager in Mexico of Nubank. “On top of this, there is a poor quality of service in the financial system, both online and in-person.” The people who are looking for 100 percent financial services today, said González, are digital natives, who are the ones driving the adoption of these platforms. The opportunity to expand into Mexico was also seized by Argentinian-based fintech Ualá, which brought its product to the northern country in September 2020. “There are more than 70 million people in Mexico who never had access to a digital payment method before,” said Pierpaolo Barbieri, Founder and CEO of Ualá. “These are people who will be left out of the financial system of the future, which will involve more and more transactions that require fully digital payment methods. The cash-only customer is going to be left out of this change,”
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H ighlights he noted. At present, Ualá already has more than 100,000 users in Mexico.
Moving the Needle on Traditional Banking The arrival of fintechs in Mexico has not gone unnoticed by traditional banks, which do not want to be left behind. According to Bnext’s Cristian Huertas, the impact this transformation has had on traditional players can be seen in the fact that the big banks are collaborating more,
medium-sized banks are trying to compete and small banks are trying to survive or focus on niche markets. “Three years ago one of the top 5 banks in Mexico did not have an app. I could not pay all utilities from my bank. That is absurd,” said Huertas, who added that this has also forced traditional banks to improve the services they offer. “We have significantly changed the plans of many financial institutions and governments. We are working to improve the quality of life through access to financial services, including regulatory initiatives.”
TRENDS TRANSFORMING THE PAYMENT TECHNOLOGIES MARKET Digital payment methods have undergone profound changes in a short time. The growing popularity of digital currencies and digital payments, coupled with advances in underlying technologies such as AI and blockchain, will bring lasting changes to the way people spend and exchange money. The pandemic further accelerated existing shifts in users’ payment preferences, making digital payments more prevalent in what may eventually become a cashless society. On May 27 at Mexico Business Forum 2021 Virtual Edition, experts of online payment modalities discussed the current status of payment methods during the panel “Trends and Transformation in the Payment Technologies Market.”
Online payment increased exponentially during 2021, said Miguel Diaz Diaz, General Director of Payment Systems and Market Infrastructures at BANXICO. This is a positive sign, “as it contributes to the healthy development of the financial system.” According to Diaz, payment methods like Spei grew by 110 percent. “These types of online payments are essential for financial inclusion, which goes beyond having a bank account and withdrawing cash.” With that limited dynamic, people do not get the benefits of the financial sector such as credits, insurance or a healthy financial ecosystem, explained Diaz. Despite this limited financial reality, in Mexico digital assists and crypto currencies are emerging but few users understand them.
H ighlights “Traditional financial services deliver exactly what digital assets promise, but they are safer and easier to understand,” said Diaz. The growth of on-line payments is a positive sign, said María Teresa Arnal, Head of LatAm at Stripe, but there is still the risk of frauds. “Mexico is the country in Latin America with the majority of frauds,” said Arnal. She explained that this results in higher operating costs for sellers with lower utilization rates, which might struggle to balance risks and experience. However, the sector aims to create solutions where no one has to sacrifice anything. René Salazar Palafox, Director Digital Payments & Financial Services at Walmart México, said that to find the balance Arnal explained, companies must invest in talent and tech. “These are complementary as they offer an improved experience through the use of technology and better safety thanks to the human monitoring the operation.” Smaller companies and startups also face drawbacks as they have limited resources to address all fraud charges, said Héctor Cárdenas, CEO & Co-Founder of Conekta. “Chargeback regulation was insufficient; therefore, all chargebacks were a loss for the company selling.” Online charges are now safer, said Cárdenas, as “there significant progress in terms of data and we can now share information with banks with more confidence, but regulation still needs to improve.” Cárdenas recommended a two-step strategy to address frauds. The first is by installing prevention tools with real-time transaction analysis that use machine learning and AI. The second is the use of tech innovation and for businesses to implement 3DS 2.0 (the new authentication protocol for online card payments). Diaz explained that there are different types of fraud, one affects businesses and the other affects the end user. This can be an even bigger problem for the latter as “users do not have the tools to identify fraud, so authorities must offer certain essential minimum requirements companies should implement to protect them from fraud.” BANXICO’s goal is to make the private sector comply with these minimums without affecting user experience, said Diaz. However, overall conditions need to change if the country wishes to keep expanding on
e-commerce, which according to Arnal “grew by over 80 percent last year.” With the digitization of payments, more businesses are accepting them and more consumers are willing to use them. “It is about giving the final user more payment options, such as spei, oxxo, payment links or credit cards,” said Arnal. Salazar explained that with the boom of e-commerce, digital orders must be complemented with “where the customer wants to pay” solutions that accept other products such as digital wallets. However, “more than 50 million Mexicans do not have access to a bank account, which is a giant opportunity for digital payment providers,” said Salazar. In this sense, omnichannel options complement payment platforms, Federico Gómez-Schumacher, VP Sales of LatAm Market at PayPal. “This is important because some physical businesses never thought of receiving electronic payments,” said Gómez-Schumacher. “Omnichannel payment methods help the user pay how, where and when they want.” It also helps businesses make more sales, according to Cárdenas. “When the pandemic is over, ecommerce dynamics will remain, which is why is relevant they have and use online options but we urgently need a product for cash payments.” In 2020, 94.6 percent of SMEs in Mexico moved to online transactions said Cárdenas, and card payments also increased compared to cash payments.
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H ighlights Cash payments, however, may always have a place in Mexico, said Tory Jackson, Head of Business Development and Strategy LatAm at Galileo Financial Technologies. “Cash is the king in Mexico, with around 91 percent of sales closing through cash.” While there is no reason to leave cash, “the benefits of online payments are clear to us. From the Mexican user standpoint, cash does not need a battery or signal to work, so it is functional for everyone,” said GómezSchumacher. The country also has to deal with
structural issues in Mexico, which is a task that concerts authorities too. Arnal agreed with Gómez-Schumacher and said that there are not clear incentives to abandon cash. “Cash is easy but it is not safe and it can be expensive, which it is not so obvious to the end user,” said Arnal. But as long as there are no products that make people chose digital payments, cash will dominate. “We need to create products that make users change on their own initiative.”
THE PANDEMIC TRANSFORMED CYBERATTACKS “If cybercrime were a country, it would be the third largest economy in the world just behind the US and China, with a US$6 trillion in value,” says Mario de la Cruz Sarabia, President of Innovation & ICTs Committee at American Chamber of Commerce Mexico and Senior Director of Public Policy and Government Affairs Latin America at CISCO Mexico. To address this scenario, experts from CISCO, Kaspersky, DHL, Huawei and Scotiabank met at Mexico Business Forum 2021 Virtual Edition, held on May 27, to discuss key developments in the cybersecurity ecosystem in Mexico and Latin America, as well as some strategies to prevent cybercrimes and respond to them.
How the Pandemic Shifted Cybersecurity Not attacks are the same, said the experts, and not all industries are similarly targeted. While financial companies were often targets, the focus has shifted. “The number of attacks and new threats grew during the pandemic and the approach is different. Criminals are primarily interested in getting money; 90.2 percent of them are moved by money,” said Claudio Martinelli, Managing Director LatAm of Kaspersky. “Over the last two years cyber-attacks have migrated from the financial sectors to the health sector,” agreed Felipe García, CISO of Scotiabank Mexico. Beyond targeting new sectors, threats have also evolved and spread due to new trends such as home office. “Cybersecurity is important as companies were forced to work remotely but domestic networks did not comply with
cybersecurity standards,” said Elvira Sanchez, VP CIO of DHL Express Mexico. “This created additional challenges and forced us to get creative on how we approached it.” Cybersecurity breaches not only have a financial or operational impact, they also hurt the reputation of the victim. “As a corporate mandate, our cybersecurity schemes and cybersecurity strategies are strongly linked to other business strategies. We call it a matter of trust. Our recommendation is to evaluate how damaged the industry or the company can be when our end-customer loses trust in us. The most important element is reputation and those who placed their trust in us,” said Martin Portillo, CISO of Huawei Technologies Mexico. A Cyberattack can also deeply hurt a company’s operations, and financial loses can be steep. “It can take between 24 and 48 hours for a cybercriminal to take full control of a company’s files which can interrupt operations or cipher certain files. An effective attack undermines your organization due to the financial, operational and reputational impact,” said Sánchez. Losing their credibility is one of the greatest risks companies can face, no matter their size, explained Martinelli. By compromising their credibility “companies are putting at risk their very existence,” he said. Despite the risk of cyber-attacks, experts agree there is not a perfect solution. “There is no infallible strategy, there is always a risk. The average cost of a cybersecurity breach of US$4 million,” said Martinelli. For that reason, companies must be better prepared to remain out of the headlines.
H ighlights First Steps Toward a Cybersecurity Strategy To build a robust cybersecurity strategy, first companies need to understand their vulnerable points , explained Sánchez. “ Preparing emergency response protocols is essential. Moreover, although we are aware immunity does not exist, we need to raise awareness among our employees, customers and suppliers.” Over the last few months, attacks to logistic companies have increased considerably, explained Sánchez, adding that the sector might by the third of fourth sector to concentrate most attacks. However, companies must consider that there is no one-size-fits-all solution. It all depends on the sector and the company’s business model. “A security solution cannot be bought in retail and installed,” said Martinelli. He urges
companies to develop a complete strategy after fully understanding the assets that need to be protected by looking at similar attacks or at the strategies followed by other companies in the same sector. Companies also need consistent training. “A yearly training is not enough; little nuggets of cybersecurity intelligence should be given to employees every day. Common targets are secretaries, the HR manger, marketing and purchasing departments.” Finally, Martinelli urges companies to invest in well-tested, comprehensive cybersecurity solutions. He also warns that no one, and no company, is fully safe. “Criminals can be pretty democratic, as they attack people regardless of their background. The currency of the 21st century is data,” he said. According to CISCO, for every dollar invested in cybersecurity ROI can be 2.4, up to 2.7 for large organizations.
THE CLOUD: BUSINESSES’ INVISIBLE ALLY Until a few years ago, the cloud was seen as a far-off tool for companies. Today, driven by technological acceleration, the business community is already looking for ways to integrate it into its daily operations. However, there are still many doubts about its implementation and benefits, agreed panelists during the second day of the Mexico Business Forum 2021 Virtual Edition. “What was once just a storage vehicle is now part of major business processes and developments,” said Javier
Allard, Director General of AMITI and moderator of the panel. Software Producer SAP, with more than 27 years in Mexico, has witnessed the evolution of companies in the country and their growing welcoming of cloud services. “Every quarter we have seen significant advances in the adoption of cloud technology,” said Angela Gómez, President of SAP Mexico. She mentioned that due to the pandemic and digital acceleration,
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H ighlights SAP has observed three main areas in which companies are increasing their use of cloud services: customer experience, supply chain and talent management. “Over the last year, all companies realized that they not only had customers, they also had to take care of them and understand how to engage with them in order to keep them. When you sell a product or service to the customer, then you have to deliver on the promise,” Gomez said. In 1Q2021, Mexico was listed as one of the most dynamic markets for cloud, according to SAP. “That shows that Mexican entrepreneurs are investing in the cloud,” added Angela Gomez. However, she said, one of the biggest challenges remains with growing businesses. “We have identified that 95 percent of SMEs in Mexico do not yet have digital tools to automate their key processes and have real-time information to make better decisions.” The cloud is not only here to improve business processes but also to offer a better user experience. According to Maribel Dos Santos, Director General and Senior Vice President of Oracle Mexico, companies are already seeing real benefits from their transformation and migration to the cloud. “The past year made us much more resilient and pushed the technology acceleration forward by many years. 2021 looks like a year of recovery but it is definitely not a year where we are going to go back to normal as we knew it before,” she said. Dos Santos also mentioned that e-commerce is also driving a shift in the adoption of the cloud, which is making companies much more agile and scalable. “The cloud is allowing the management of everything to do with customer logistics to be done in a faster and more efficient way, which creates a better customer experience,” she explained. “It has also enabled the storage of large amounts of data that allows better business decisions to be made through data analytics.”
“We used to offer customers infrastructure or software as a service. Today we need to approach them in a holistic way so that they see it as a ‘Business Transformation as a Service’” Angela Gómez
President of SAP México
Hybrid and Multi-Cloud Environments Cloud In migrating from one location to another, companies often end up operating in hybrid or multi-cloud environments. For Julio Velázquez, Managing Director of Google Cloud Mexico, these have two main opportunities: cost optimization and access to state-of-the-art managed services that “drive the development of business transformation.” Managing these environments, he said, is a challenging task as it involves both public and private clouds. Velázquez said as applications and services are going to be hosted and operated across different locations, it is a very complex administrative task and without the support of technology, this whole infrastructure cannot be optimized. Faced with this challenge, Google Cloud recently launched Anthos, an enterprise hybrid and multi-cloud platform. According to a study by Forrester Consulting, Anthos reduces infrastructure costs and helps customers design applications to optimize their existing infrastructure, while at the same time combining it with the cloud infrastructure in an efficient way. “This means you can leverage what you already have but also look for new, more flexible schemes,” said Velázquez. This new tool also helps improve cloud security as the service is “transitioning from traditional perimeter security to an application-centric security approach”. According to a Harvard Business Review study cited by Velázquez, some of the benefits that are driving the adoption of hybrid and multicloud environments are operational efficiency, performance optimization and increased agility. In this regard, Eduardo Gutiérrez, President and CEO of IBM Mexico, said that the recent digital transformation of companies has made the hybrid cloud one of the most relevant trends. “The open hybrid cloud platform today is the main ally and enabler that helps companies in the integration and reinvention of their business processes,” he added. “It will redefine the way companies operate, but more importantly the value they deliver to their customers.” IBM’s hybrid cloud approach gives companies flexibility to balance workloads as they undergo a digital transformation, said Gutierrez. “It is clear that business models are transforming and this is precisely because of the new reality we are experiencing. We know this requires a
H ighlights complete reinvention of customer experience, organizational culture and business processes,” he said. According to him, the five benefits of IBM’s open cloud include security, agility, mobility, flexibility and cost-efficiency. In July 2019, IBM closed the acquisition of Red Hat, marking the company’s largest deal in its history. At the time, IBM said it hoped the acquisition would help it improve its cloud strategy, one of its four key growth drivers, the others are: social, mobile and analytics. In April, 2021, the tech giant announced the acquisition of Turbonomic, a provider of software that helps companies monitor the performance of their business applications, for over US$1.5 billion.
A Smooth Migration When a company migrates to the cloud, shutting down its operations is not an option. For Oracle’s Maribel Dos Santos, one of the factors that allows them to maintain operational continuity during this process is transparency. “The safest way to do it depends on the criteria of each company. We need to understand what type of company we are working with, understand its objectives, its process maturity and business architecture.” This way, she added, tech suppliers can better guide their customers on a safe journey to the cloud. Migrating to the cloud should be seen as a holistic process, added SAP’s Angela Gómez. “We used to offer customers infrastructure or software as a service. Today we need to approach them in a holistic way so that they see it as a ‘Business Transformation as a Service,’” she said. “In the past, companies had to first understand what the cloud was, but today
the conversation has shifted to issues such as usability.” According to Gómez, cloud providers need to allow companies the freedom to choose which business area to start migrating to. “We have to understand different industries. It is not the same to provide cloud to a retail company that experiences peaks in demand than to a company that produces 24 hours a day and can face large costs if it has to shut down operations to do the migration,” she explained.
Security, a Non-negotiable In all industries and services, security has taken a central and imperative role, to which the cloud is no exception. According to data storage company Seagate, by 2025, there will be 175 zettabytes of data in the global datasphere. That same year, the amount of data generated each day is expected to reach 463 exabytes globally, says the World Economic Forum (WEF). “Not only is data increasing but so are the places where the information is stored. This results in complex data management,” said Abelardo Lara, Country Manager of Veeam Software. Lara added that one of the main solutions Veeam offers is to keep information secure and backed up. “Many of our customers feel that when moving their data from a public cloud to a hybrid cloud, it is the provider’s responsibility to keep their data secure,” he explained. In 2020, Veeam was the largest backup and recovery vendor in the EU, the Middle East and Africa, and the fourth largest worldwide behind DellEMC, Veritas and IBM. In Mexico, the company grew 35 percent last year compared to 2019, while in Latin America it saw 30 percent growth, Lara said.
THE FUTURE OF WORK IS HERE The digital industrial revolution has been coming for a long time, but the pandemic greatly accelerated this transition. As the world is forced to adopt technology at an ever-faster rate, experts came together to discuss the transition towards a more agile world during the “The Future of Work” panel, held at Mexico Business Forum 2021 Virtual Edition. “It is no longer enough to set companies’ goals for the far-off future. Now companies have to
discuss how their situation might change in a maximum of one year,” said Jorge Ponga, Partner at Humanólogo Consulting. “The biggest challenge we are facing has been coming for a long time, but it was accelerated by the pandemic; the digital industrial revolution has brought a more agile world.” For a successful transition, companies must consider the three “W”s. First, the ‘work’ that is necessary and taking place, supported by joint intelligence. Second, prioritizing the ‘workforce’ by addressing the
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H ighlights strengths of collaborators, super collaborators, super teams and super jobs. Finally, transforming ‘workplace’ to allow companies to capitalize on the digital transformation. “There are have been many challenges but those obstacles can be turned into opportunities,” said Liliana Gómez, Area Director at WeWork. To do so, “you have to review relationships within your working life and see how everything is being rethought to know what is expected of workspaces,” said Gómez. Companies can have their own flexible model, they have to be aware that teamwork has changed and the key is to ask questions all the time to see if the transformation is going the right way, she explained. Through this transformation, the first challenge is to make employees feel comfortable and not threatened by the digital transformation, explained Santiago Gutierrez, VP of Mexico, Central America & Caribbean at Pearson. “All economic sectors have been changed by technology forcefully, so employees should not feel threatened by the impressive speed at which changes are happening. The opportunities generated are gigantic, starting with the fact that companies can get global talent that was not so viable before.” “Human beings are at the beginning and the end of any company,” said Federico Cerdas, CEO of Global Businesses Inc. But this can also be a challenge: “The greatest challenge is helping employees adapt to this reality. Companies have to see how they adapt to work online and combine it with life at home. Governments have to ensure that work activities are lawfully adopted and regulated.” In this sense, Cerdas suggested companies to find ways to and tools that allow collaborators to continue working at home, such as paying for their internet. Finally, Cerdas added that there is another opportunity supporting a company’s cultural exchange remotely as previously this was only achieved in person. “We have to understand how to exchange perspectives online,” said Cerdas. The global crisis broke paradigms in companies, starting with the home office, explained Alma Rosa García Puig, CEO of Great Place to Work. “Personal and work spheres came together as the entire office entered your house. The challenge came from trying to find a new balance of work and personal life.” However, García identified advantages in the new model,
such as that “people now work more and are more productive.” The challenge, however, remains helping them remain motivated. She suggests doing so by “transforming the way you communicate, set boundaries between work and home and put the employee at the center of the equation. Francisco Ruiz, Knowledge Management Manager at Tecnatom, added that companies are now obliged to adapt. “It is now necessary to live with uncertainty and insecurity; there is no adaptation without learning. Learning must be our best competence today and our main concern must be to learn to adapt.” However, the digital transformation is giving companies the opportunity to do so, explained Ruiz. “Now, we have a universe of learning high-quality opportunities because technology allows us to learn from the best within reach of two clicks. We can improve performance and do so with quality thanks to technology.” Engagement takes on more relevance when employees work remotely, highlighted Gutierrez. “We have to create a comfortable and safe environment for workers. If work continues at employees’ homes, this environment must be achieved,” he said. He urged companies to observe employee’s KPIs and help them understand their role within their team. García Puig added that it is necessary to generate committed employees in an environment of uncertainty: “to the extent that the company puts the employee at the center, it gives it better profitability. If the company is committed to the welfare of the employee, the employee will do the same.” “Companies have to start putting the human being at their core,” agreed Ruiz. “Believing that the mission is greater than the person, allows the collaborator to become intertwined with the company. In addition, personal growth, good salaries, motivation and professional growth will allow companies to get 100 percent of their employees.” The pandemic accelerated everything and brought opportunities to improve work, automate processes, access information in realtime, make decisions in a more agile way, added Mendéz. “There are many opportunities that the industry has at this time, and it must be considered what changes must be made to take advantage of all of them.”
H ighlights “Obstacles have turned into opportunities, and, in the end, invention helped to redefine concepts such as commitment. We have to put ourselves in a place where we are not comfortable. Put
yourself to the test during the digital shift and change workplaces. The knowledge we have acquired is not enough; it must be enhanced and exploited,” said Ponga.
AUTOMATION MAKES HUMAN LABOUR MORE VALUABLE A year into the pandemic, businesses in Mexico are evaluating how best to move forward in their digitalization process. They have encountered challenges and opportunities along the way, but one thing is clear: human talent is key to success in this transformation, agreed panelists on the third day of the Mexico Business Forum 2021 Virtual Edition. “The pandemic has brought an acceleration in the digital transformation of companies. This is relevant in the development of new skills that we have to develop in our work teams,” said Selene Diez, CEO and Founder of Forte Innovation Consulting and moderator of the panel.
In agreement, Diego Garza, Sales Director of Intel Mexico, said that there is no longer a difference between technology and nontechnology companies. “In this process of digital transformation, all companies have done it to a greater or lesser extent. Competition in the market has been transformed and that forces digitization. More than non-technological companies, there are low-tech and high-tech companies,” he added. “Companies used to compete head-to-head with others in their line of business, but the reality is that today the competition is very different and they compete against platforms and startups.”
Regardless of a company’s line of business or level of technology, no one is oblivious to global trends such as climate change, glocalization or urbanization, said Alejandro Preinfalk, President and CEO of Siemens. “The question is not whether or not to ride this wave, but when. We are convinced that the time is now, regardless of the company’s line of business.” Preinfalk also mentioned that it is important to adapt to the technological moment we are in. “The last decade was about connecting consumers to the cloud. This decade has been about connectivity, IoT and AI”.
According to Garza, for less tech-savvy companies the easiest way to accelerate their digital transformation process is to start with the basics, such as “managing their devices first, eventually expanding and finally interacting with their customers with new digital processes.” For him, what made many companies successful a few years ago is no longer going to work now, so it is necessary to embrace a digital model as a company and build experiences for customers around that.
According to Preinfalk, 60 percent of industry professionals have yet to implement IoT technology on a large scale. But by 2025, 70 percent of investments are going to go into building connectivity between technology, industry and infrastructure to generate smart data. “Digital transformation is not only about technology but also about people. It forces us all to reinvent ourselves every day, but also to rethink leadership models. A culture of growth is key to staying relevant as a company and as a professional. It is also important for digitalization to be inclusive and not only focused on technology,” said Preinfalk. In the last six months, Siemens has invested €320 million (US$390 million) in training and education for all employees.
On the banking sector, Sergio Torres Lebrija, Strategy and Innovation Head of Digital Banking at BBVA Mexico, said that a few years ago the bank bet on digitalization in almost all areas of the company, to great success. “Before, when people went to a branch they had to queue to be assisted. Today they come in and get a digital turn to be channelled to the different areas of a branch.” He added that this model has also started to evolve and through the app, customers can now get a “digital turn.” Eventually, this service will evolve to use facial recognition in branches to let the bank know who the customer is, what they are looking for and what they might need. According to Torres Lebrija, BBVA Mexico currently has 23.5 million customers, 55 percent of whom make their transactions digitally. Likewise, 67 percent of the bank’s sales are digital. “Seven years ago, 90 percent of all
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H ighlights transactions were in branches, today it is only seven percent, the rest is digital,” he said. “This would not have been conceivable five years ago and it has been thanks to automation, digitalization and people.” The mobility sector has also not lagged behind when it comes to digitization. “This transformation has reached all of us. We used to compete with the trucking industry, today we are competing with platforms like Uber,”
said Olivier Bouvet, Transformation Experience Officer of MOBILITY ADO. In this evolution, he added, people play a key role. “At the end of the day, implementing technologies, databases or IoT are means for companies to achieve their goals, but you need to have the people who can understand, prioritize and execute.” According to Bouvet, companies should focus on three main characteristics of human talent: self-management, adaptability and happiness in order to “move forward in this transformation”.
TALENT STRATEGIES FOR SUCCESSFUL BUSINESS Due to the pandemic, 43 percent of Mexicans feel that their mental and emotional health has deteriorated, reports Ipsos. In this new environment, companies are placing their employees’ emotional wellbeing at the center of their business strategies, leading them to embrace new technologies to effectively manage their staff, agreed panelists at Mexico Business Forum 2021 Virtual Edition, held on May 28. During the panel “Talent Strategies for Business Success in 2021,” human resources experts addressed the disruption of labor conditions and how these changes have brough an opportunity to rethink the current working dynamics and provide better working environments. “We cannot neglect our collaborators menta health and physical health, especially during these challenging times,” said Nora Villafuerte, Human Resources Vice President of Nestlé Mexico Group. The current situation brought
changes mainly in three areas: demographics, individuals and technologies. “This forced people to adapt to the new working conditions while learning technological skills and balancing their personal life and feelings,” said Guido van der Zwet, General Manager of iPS Powerful People. During this period, technology plays a key role as it supports human work and even generates more employment opportunities, added van der Zwet. “Administrative jobs might be losing strengthen but by learning technology skills, people can aspire to even better jobs.” By 2025 there will be many positions that potential employees will be unable meet with their existing qualifications, said van der Zwet, therefore “companies need to train their workers for this transition.” “As we enter the new normal, it is also important to recognize that our employee’s families matter
H ighlights for the person’s integrity, health and wellbeing,” said Gabriela García, SVP Human Resources at PepsiCo. “We owe flexibility and comprehension to our collaborators, as during the pandemic they have remained resilient and adaptable,” she said. To García, 2021 has been just as eventful as 2020, giving companies the opportunity to reinvent their approach and focus on the collaborator’s life experience beyond their work. “Many companies in Mexico have witnessed intrafamily violence, which will inevitably impact their collaborators’ development. Therefore, we must make our team members feel safe and comfortable at the work by promoting inclusion.” “Family is indeed a priority and it was the greatest concern for our company during the pandemic,” said Maite Delgadillo, HR Director of Scania. She explained that during the past year, Scania “worked as a team to provide facilitate supplies” to collaborators. Companies need to be flexible, not just now but during the longterm, added Delgadillo. It is also crucial for companies to trust their collaborators. During the pandemic, Mexico climbed the charts and took first place in cases of depression, said Gustavo Linares, Head of Human Resources for the International Rescue Committee and Founder of TalentHow. The reason for that might be the challenges employees faced to balance home life with work in the same environment, suggested García. “The majority of Mexicans do not have the conditions to work from home as there are many things to take care of at the same time.” García suggested companies to integrating families into their initiatives. For example, “we offered PepsicoKids as we are aware that parents have little to no time off from their kids during COVID-19, so we organized activities for them to relieve the burden.” “Companies need to be adaptable and flexible,” said van der Zwet. “There is not a single solution for all issues, everyone works at their own time and pace due to their different conditions at home,” said van der Zwet. Companies that wish to be sustainable must have a socially inclusive workplace that enhances the feeling of belonging for each collaborator, he added. “Also, companies need to rethink old working schemes of daily office attendance on a nine to five schedule, which in Mexico is often longer.”
HR areas must be the copilots of the company, said Villafuerte, since human assets are the core essence of a business. Companies could reinvent work schemes by analyzing the needs of every person to “we determine the way they work productively and happily,” said Villafuente. According to studies, 87 percent of today’s jobs can be successful in a hybrid work modality, said van der Zwet. “This will present an infrastructure shift where offices will be smaller but hosing spaces will require different commodities offer home-office spaces.” According to García, for this hybrid modality to work “adaptability is the name of the game.” But these new schemes should forsake a “persecution” culture to focus instead on “accountability and trust to have a healthy working environment.” “It all begins and ends with people, therefore, empathy and care for employees will make companies transcend,” said Delgadillo. In that sense, leaders play an essential role in setting expectations and targets, so companies should also invest in developing their leaders, said Delgadillo. “We need to focus our trainings on how to lead remotely.” In that sense, technology trainings could go much further than in teaching people to use Zoom or other software, they can also teach the soft skills that leaders need, explained Villafuente.
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