Mexico Business Forum 2022 Echo - Impact Report

IMPACT REPORT

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The world is facing a challenging year following the COVID-19 pandemic, a seemingly ever-increasing inflation, supply chain disruptions and continuous changes in customer demand. These problems are shaping a new reality in business and finance. While uncertainty is creating numerous challenges for companies, it is also creating new opportunities for those ready to take them.

To address some of these challenges, businesses are seeing the value of adopting technology solutions to be able to meet rapidly evolving customer demands. But as technology continues to evolve, so have customers. Additionally, digital service competition is at an all-time high, leaving little room for error. Technology is opening endless possibilities for new types of innovations and solutions.

While 2022 was full of challenges, 2023 is expected to bring much more disruption to Mexico and abroad due to an expected global recession. At Mexico Business Forum 2022 ECHO, industry leaders highlighted how businesses should address these challenges by transforming their operations. They also discussed the importance of technology and how to leverage it to become key players in their sector. As the premier event in the business, finance and tech sector, Mexico Business Forum 2022 ECHO provided an ideal space for key decision-makers to share their perspective and build a discussion around the latest trends affecting all industries and sectors of the Mexican economy.

• A3Sec

• Academy of Well-Being LLC

• Acclaim Energy México

• Advisory Network for Wellbeing

• Adyen

• Amplifica Capital

• Angel Ventures

• ANNIT

• Another

• Aosenuma

• Apollo X

• ArIDr A

• Arista Technologies

• Arrenda

• Asesoriaenfarmacias.com

• ASOFOM

• AT&T

• Bankuish

• BC&B Law & Business

• Bitso

• BMC Software

• Bnext

• Brella Ltd

• Buk

• Business Finland

• C&A Mexico

• Cámara Nórdica de Comercio en México A.C.

• Canadian Chamber of Commerce

• CANDO

• Cardinal Health

• CasAgua

• Central Media

• CITrUS Industrial Decarbonization

• Climate Bonds Initiative

• Cluster Aerospacial Chihuahua

• COFECE

• Colliers

• Consejo de Empresas Globales

• Consultoría Sustentable G2H

• Cr LEGAL PArTNErS

• Credimotion

• CriskCo

• Cumplo

• delt.ai

• DENODO

TECHNOLOGIES

• DHL EXPr ESS MEXICO

• dLocal

• Doctoralia

• DocuSign

• Dux Capital

• Egis in Mexico

• ENSO Fintech

• F&C Consulting Group

• Falabella / Linio.com

• Fibra Uno

• Fintual

• FOrTE INNOVATION CONSULTING/ METAPHOrCE

• FUMEC

• GAS / ENErGy

• GBM

• Genesys

• Glitzi

•

Global Health Intelligence

• Globalization Partners

• Gobierno de Ontario, Embajada de Canadá en México

• Grupo Samaredi

• GUSCHAT

• Hi Granoli

• Hitch

• Hitsbook Group

• Holland House Mexico

• Hoocax

• Incode

• Innocentro

• Intel

• IOS OFFICES

• Japan Extrenal Trade Organization (JETrO México)

• Kannbal Consulting

• K-M Femme

• Konfio

• Kostik

• KPMG

• LatamIB

• Liquido

• logistica

• Magenta registro

• Mamotest

• MEDICE Arzneimittel

• Medikit

• MeetingDoctors

• Melonn

• MexicoView

• Microsoft

• Miel AraBee

• Mitsui & Co. Power Americas

• Mobility ADO

• Mora Mora

• Morgana

• Motor brewing Co

• Multiled

• NautechMX

• NAVIEr A INTEG r AL

• Nexus Energía Mx

• Nu Mexico

• Nyx technology

• OSy | Ortiz, Sosa y Asociados, S.C.

• Page Group

• Palenca

• Parkeo

• PEEK Latam

• PEMEX

• PharmAdvice

• Pickit

• PineBridge Investments

• Porter Novelli

• Pr4yOU

• Public Power Utility

• rackspace Technology

• r AMA MANTENIMIENTO INDUSTr IAL TOTAL

• renault Mexico

• r Er Energy Group

• reversso

• revolut Mexico

• reworth

• rising Farms

• robert Walters

• S·fleet

• Sánchez Devanny

• SAP Customer Experience

• Scale radical

• SEA

• Secretaría de relaciones Exteriores

• Senate

• SentiOne

• Siemens

• Signifyd

• Simplot Mexico and Centro America

• Skala Ventures

• Skillnet Solutions Inc.

• Snowflake

• Softtek

• Solfium

• Soluciones socioambientales

• Someone Somewhere

• Spin by OXXO

• Spread

• SPyr AL

• Stripe

• SUMe, Sustentabilidad para Mexico

• Talent.com

• Tecnoap

• TEKNE

• The Wall Street Journal

• TMF Group

• Tokio Marine Mexico

• Tr ANSPLACE

• Troquer

• Uber

• UNIÓN DE Cr ÉDITO DEL SOCONUSCO

• UPS

• Urbvan / Swvl

• VEMO

• Vinco

• VTEX

• Waze

• WorldWise Consulting LLC

• Zacua

• ZEPrI AG rICULTU r A

09:00

HOW CAN MEXICO INCREASE ITS PRODUCTIVITY?

Speaker: Rafael Muñoz Moreno, The World Bank

09:30

BUILDING A COMPETITIVE, SUSTAINABLE AND PROSPEROUS COUNTRY

Speaker: Alberto De la Fuente, Global Company Council

10:00

INNOVATION AND BUSINESS TRANSFORMATION IN AN UNCERTAIN WORLD

Moderator: Vladimiro de la Mora, American Chamber of Commerce of Mexico

Panelists: Silvia Dávila, Danone

Mauricio Torres Echenagucia, IBM Mexico

Mariano Perotti, Diageo Mexico

Fernanda Guarro, 3M Mexico

11:30

TECHNOLOGY TRENDS BOOSTING COMMERCE DIGITIZATION

Speaker: Ricardo García Betancourt, VTEX

12:00

HOW WILL CONSUMERS SHAPE THE FUTURE OF RETAIL?

Speaker: Daniel Navas, Mora Mora Juan Montes, SAP Customer Experience

Alejandro Sisniega, Jüsto Kelly Kroger, C&A México

Benjamín Santa María, reversso

12:45

LOGISTICS AND DIGITIZATION TO IMPROVE LASTMILE PROCESSES AND DELIVERIES

Moderator: Edvard Pettersen, pickit Mexico

Panelists: Antonio Arranz, DHL Express Mexico Andrés Archila, Melonn Daniel Colunga, Uber Eats Mexico

15:00

FINTECH FOR BUSINESS: CREDIT, LIQUIDITY AND EXPENSE MANAGEMENT

Moderator: Enrique Presburger, ASOFOM

Panelists: Cristina Valero, Konfío

José De la Luz López, Delt.ai Alejandro Villalobos, Cumplo México Cristina Cacho, Clara

15:45

PAYMENTS: OPTIMIZING AUTHORIZATION RATES AND FRAUD PREVENTION

Moderator: Erick McKinney, Adyen

Panelists: Christian León, Signifyd Pedro Rivas, Mercado Pago María Paz Olaso, dLocal Diego Creel, Incode

16:30

WHY DOES LATAM PRODUCE SO MANY FINTECH UNICORNS?

Moderator: Álvaro Rodríguez Arregui, IGNIA Partners

Panelists: Bárbara González Briseño, Bitso Sebastián Castro, Kushki Vincent Speranza, Endeavor México Sergio Almaguer, yaydoo

11:30

EXPERIENCE ORCHESTRATION: THE NEXT FRONTIER IN CX

Speaker: Óscar Parra, Genesys

09:00

REINVENTING BUSINESS VIA THE CLOUD

Moderator: Alexis Langagne, Softtek USA

Panelists: Óscar Parra, Genesys

Rodrigo Martineli, rackspace Technology

Sergio Sánchez Polo, Snowflake

10:00

THE BRIGHT FUTURE OF DATA-DRIVEN BUSINESSES

Moderator: Ximena Salgado, Nu

Panelists: Sergio Dueñas, GBM

Alejandro Preinfalk, Siemens

Ingrid Avilés, Waze

Ferdinand Leon Meister, SentiOne

12:00

DATA MANAGEMENT: PRIVACY, SECURITY AND RESILIENCY PRIORITIES

Moderator: Rommel García, KPMG Mexico

Panelists: David Ruiz, Google Cloud

Eric Rossati, DocuSign

José Andrés García, Denodo

13:00

TECHNOLOGY AS A SERVICE, RATHER THAN A PRODUCT

Moderator: Víctor Noguera, Flat.mx

Panelists: Lise Vives, KAyAK

Desmond Mullarkey, Stripe

Ytzia Belausteguigoitia, Troquer

Nicolás Knockaert, Houm

15:00

BUILDING A SUSTAINABLE FUTURE; WILL WE REACH 2030’S GOALS?

Moderator: Karen Mora, FUNO

Panelists: Ignacio González Quirasco, Chedraui

Felipe Villarreal, Alian Plastics

Daniel Ríos, AT&T

Peter Harris, UPS

KEYS TO INCREASE LABOR PRODUCTIVITY IN MEXICO

Between 1994 and 2019, Mexico saw alarmingly little growth in productivity, especially when compared to the emerging economies that have used new technologies and digitization to catch up with first world countries, reports the World Bank. One of the country’s key issues lies in its inability to fund SMEs.

“In Mexico there is a big problem: being a productive company does not ensure you get credit. Since funding is more concentrated in medium and large companies, this greatly limits young companies from investing and taking risks, as banks do not give them credit due to their lack of guarantees,” said rafael Muñoz, Lead Country Economist for Mexico, the World Bank.

“In general, the Mexican business community evaluates itself much more positively in terms of management capacity than it truly is. In this, Mexico is an outlier, has an average management average and has the highest self-assessment score”

majority of businesses in the country. The lack of access to financing causes stagnation in productivity.

Mexicans are entrepreneurs, said Muñoz, as companies with less than five workers represent about 30 percent of the country’s employers. But the lack of financing stops these companies from growing. “Without funding, it is particularly difficult to innovate, since the return is only possible in the medium and long term,” said Muñoz. Moreover, Mexico faces many issues to obtain funding for r&D.

“In Mexico, credit does not go to the most productive companies. Approvals depend a lot on real estate guarantees that are difficult for small companies to obtain,” said Muñoz. Furthermore, regulatory barriers, uncompetitive markets and an obsolete bankruptcy regime do not favor the exit of unproductive firms from the markets that continue to absorb critical inputs for the productive firms. For that reason, the reallocation of resources from less productive to more productive companies does not occur in Mexico, said Muñoz.

| The World Bank

Rafael Muñoz Moreno Lead Country Economist for Mexico

The Mexican economy has faced 30 years of relative stagnation and low-growth, as well as a fall in GDP per capita when compared to the US. In addition, Mexico faces a major problem in the notorious disparity between its different regions. Overall, the aggregate totalfactor productivity (TFP) shows a negative value during almost the entire period between 1994 and 2019, found the World Bank after analyzing over 20 million companies surveyed through six economic censuses.

One of the possible causes behind this problem is that Mexican companies have a strange relationship with the benefits of being productive, said Muñoz, unlike other countries with better productivity indicators. This represents a critical issue, especially considering that SMEs represent the vast

Modern companies that are integrated into the global value chain, which are almost always foreign and multinational brands, have twice the productivity of similar non-integrated companies. However, this higher productivity is not leveraged, so other Mexican companies do not take advantage of the opportunity areas left by these major enterprises due to the lack of domestic linkages.

Domestic companies have not been able to collaborate with these foreign companies. “Barely 25 percent of the total value of the country’s exports are domestic intermediate inputs, compared to a foreign contribution of 36 percent,” said Muñoz. This is a particularly low rate compared to other countries with largely manufacturing approaches such as China, he added.

Innovation within the country is also limited by the lack of adequate business management,

as there are few companies that have the necessary resources to manage the FDI that enters Mexico. This means that these resources are exclusively given to a selected group of transnational companies that have both the human and capital infrastructure to manage it. The best-managed companies in Mexico, those that are above the 90th percentile, are similar to the US-average company in level of management.

“In general, the Mexican business community evaluates itself much more positively in terms of management capacity than it truly is.

In this, Mexico is an outlier, has an average management average and has the highest self-assessment score,” said Muñoz.

Contrary to other OECD countries, the large dispersion in labor productivity among states has remained during the last three decades and most states with low labor productivity have faced stagnation. Exporting firms are geographically concentrated in the north and east of the country, which explains why these regions are better linked to FDI attraction. However, despite the lack of convergence at the state level, the analysis suggests convergence at the municipal level, so rich states are growing faster only because they

have a higher proportion of municipalities growing above the national average.

If a municipality is growing in a state with low productivity, there is no reason why the other localities in the region cannot also increase their productivity, said Muñoz. Urbanization offers higher productivity but only when complemented with the right public policies such as transportation and land use. The quality of infrastructure directly affects the productivity of the companies involved in the region, as well as the access to markets and the involvement of strong government institutions where companies feel safe to invert and grow.

To tackle this problem, the growth of young productive companies needs to be favored, with guarantee programs for production companies that ensure financial limitations through productivity metrics, explained Muñoz. In addition, productive factors must be relocated, allowing for the mobility of labor and capital by reducing labor and business regulations that affect companies during crises. Closing regional gaps is also necessary, as well as complying with all the necessary measures within thes e regions.

BUILDING A SUSTAINABLE FUTURE

With the deadline quickly approaching, the world is running out of time to meet its sustainability 2023 Agenda, 6.5 years after it officially came into force. The latest

progress report by the UN indicates that the world is far off track from meeting its goals. Moving forward, the world requires a more practical and focused approach. Thus,

reformulating and prioritizing objectives will be essential.

Scientists have even mentioned that the “transformation” brought on by the Goals has been mainly rhetorical. Data collected so far shows that years of development have been set back due to the pandemic. “2022 has been a complicated year. As soon as we started to surpass the COVID-19 pandemic, we started to face the consequences of the russia-Ukraine conflict. The COP27 started this week and we are realizing that we are not progressing at the desired speed to minimize the challenges that climate change is posing,” said Alberto de la Fuente, President, Global Company Council.

The 2030 Agenda requires decisive actions from all social actors to establish new values and objectives. “A new relationship between the state, society and companies has to exist. What has been done so far is not yet enough,” explained de la Fuente.

The agenda also calls for a clear awareness of the impact of everyday actions in sustainability. The objectives set a benchmark that companies can use to “help them to adjust and articulate their business models, identify opportunities for improvement or find new market niches, but these benefits or efficiencies should not only be accounted for the company but for society as a whole,” according to the UN.

Experts advise that the 2023 Agenda should keep adapting to respond to realworld policy needs. In Mexico, achieving sustainable development goals through companies implies having the mechanisms and tools that allow them to measure

progress and improvement opportunities. Above all, it requires a common purpose that must be based on agreements and serious commitments by all stakeholders.

For Mexico to be successful it has to start growing by between 4-5 percent across all regions. The country has several advantages that can be leveraged to boost this growth such as its geographical position, its link with the US and the large number of international treaties, among others. However, there are challenges that are still hampering this progress. “To close the gaps that we have in our own country we must invest in a solid industrial policy, infrastructure, education and rule of Law,” added de la Fuente.

Companies now invest between 3-10 percent of their budget on security and violence in Mexico can have an impact of 10 percent on the GDP, added de la Fuente. Meanwhile, the lack of r ule of Law generates uncertainty regardless of the large network of international treaties that Mexico has. Additionally, Mexico must boost its energetic transition as foreign companies need green energy in abundance. “The electric transition in Mexico is essential for its survival,” said de la Fuente. The country also has to invest in its industrial policy to start being considered a hub of innovation and not only a manufacturing des tination.

“We are living in a pivotal moment due to climate change, health issues and the geopolitical reconfiguration. Mexico has to become a competitive, equitable and prosperous country by betting on social development and boosting responsible behaviors,” said de la Fuente.

MEXICO’S BUSINESSES TO BENEFIT FROM MAKING NECESSARY MISTAKES

Persistent market volatility and compounding uncertainties in the global economy are making subsequent innovation investments appear as highrisk activities. Nevertheless, if Mexico is to emerge as a global technology

and innovation hub, companies need to continue pursuing innovation initiatives. As companies prepare for a forecasted economic downturn, the country needs to build a culture of tolerance towards mistakes, conduct risk-management and

build a national ecosystem dedicated to innovation, according to industry leaders.

“The numbers clearly indicate that companies that innovate have a better return on investments and enjoy greater market longevity. Moreover, countries that support widespread domestic innovation are more globally competitive, thereby pointing to a missed opportunity on behalf of Mexico which has slipped in recent years,” said Vladimiro de la Mora, President, AmCham Mexico.

Market conditions established and sustained by the COVID-19 pandemic prompted companies to accelerate their pursuit of digital and procedural innovations that effectively allowed them to reach consumers, survive and even grow even amid unfavorable conditions. Across industries, companies made significant investments in cloud computing, data-analysis and cybersecurity, among other areas, to culminate in a digital “quantum leap at both the organizational and industry level,” according to a McKinsey Global Survey of executives. Among them, early adopters and innovators were uniquely positioned to become market leaders, effectively cementing technology as a prerequisite to domestic and global leadership. However, market conditions have continued to evolve. High inflation, continuously rising interest

rates and geopolitical fragmentation have spelled out new market challenges that necessitate more conservative fiscal policies.

Countries have responded to these series of shocks by looking out for themselves, but “fragmentation in the world economy means we might see shifts in supply chains that impact on the cost structures on a more permanent basis,” said Kristalina Georgieva, Managing Director, International Monetary Fund, in a press conference in Wa shington.

Meanwhile, amid this reconstruction process, it has become clear Mexico has the potential and capacity to become a global hub for technology development and innovation. Moreover, supporting this opportune transition has the potential to curb foreign technology imports, accelerate the nation’s migration to Industry 4.0 and establish Mexico as a center of multidisciplinary innovation, according to academic directors at the Universidad Autónoma del Estado de Puebla (UPAEP). Building up this productive capacity, however, rests on infrastructure that currently does not exist and will require significant public and private investment to construct.Until then, companies will be charged with driving innovation in a country with limited support by the federal

government, according to industry leaders at Mexico Business Forum 2 022 ECHO.

A primary and actionable starting point for greater state participation “is the formal creation of a national association dedicated to supporting an innovation ecosystem that includes all business entities,” says Fernanda Guarro, General Director, 3M Mexico. “In this respect, Mexico is behind other emerging countries like Brazil, which has relied on a federal agency for innovation (FINEP) to ‘transform Brazil through innovation´ since 1967,” she added.

Currently, the closest semblance to a state institution supporting innovation domestically is Mexico City’s Digital Agency for Public Innovation, established by Major Claudia Sheinbaum in 2019 with the goal of “promoting transparency within the government, closing corruption loopholes, simplifying procedures and deploying technology to improve public policies,” according to Cities Today. Consequently, with disaggregated clusters of innovation spread throughout the country and no clear focal point to exchange and build upon ideas, Mexico’s holistic innovation capacity is considerably debilitated. In this respect, “companies should not fear association or collaboration opportunities, as they stand to benefit from organizations specialized in aspects that their companies can learn and benefit from,” said Mariano Perotti, Country Manager, Diageo Mexico. This was a “hardlearned lesson for IBM, which used to think that innovation was something that it could carry and lead in on its own. Co-creation is infinitely more efficient,” said Mauricio Torres, President and Technology Lead, IBM Mexico.

Beyond this initial jump-off point, “Mexico’s federal government should also consider revisiting its entrepreneurial regulatory framework, which largely restricts the viable entry of new competitors that could disrupt market conditions and drive innovation,” said Silvia Dávila, President and General Director, Danone LATAM and Mexico. Other considerations include greater investment in the generation of STEM talent, increasing accessibility to capital and the development of supporting infrastructure,” added Guarro.

In the meantime, however, business leaders can drive innovation within their organizations by instilling a “culture of tolerance towards mistakes.” The caveat is controlling allocated budgets towards potential mistakes so that they do not hurt organizations, suggested Davila. Furthermore, companies also stand to benefit from the anticipation of emerging technologies and trends by comparing internally developed conclusions with external perspectives, including those of clients, competitors and forums that may view the same problem from a different perspective, said Perotti. Considering this outside perspective is helpful to “balancing priorities between short-term delivery on products and solutions and long-term business longevity” he added. Given that innovation is a continual and unrelenting cyclical process, organizations need to be intentional about making time and space to encourage innovation, argues Guarro. Lastly, building an internal capacity for data analysis will play a defining role for companies in 2023 which promises to help “companies run at the rate of change within the market,” sa id Torres.

TECHNOLOGY TO FULLY TRANSFORM THE FUTURE OF COMMERCE

The increasing shift to digital shopping channels, brought in by the pandemic’s e-commerce boost, shows no sign of reversing. From user experience to product pages and other strategies, new challenges are shaping the future of Mexican businesses and their role within the economy. In 2022, companies are expected to settle into a “new normal” where disruption is always around the corner. To keep up with these changes, tech can help them to rethink what they produce and how.

While digital commerce has its perks, maintaining all aspects in place and developing the voice of the brand online has become the decisive point between companies that bloom and those that do not. Physical stores maintain a place for the public that prefers to touch, smell and try on their clothes or products. The challenge for brands relies on how to connect the perks of physician stores with the world of e-commerce, said ricardo García Betancourt, Vice President of Enterprise Sales Mexico and Central America, VTEX.

Prioritizing user experience is essential to excel in the e-commerce game, according to e-commerce platform VTEX. A flawless product page is also key. Content-wise, the

shopper is always happy to see a fast-loading product page with easy and fluid navigation, high-quality, detailed photographs and clear and accurate information. Keeping customer experience as a priority will lead to great results and regular clients, according to VTEX. Thus, maintaining a flexible, scalable and customizable platform has become a must.

E-commerce not only benefits the customer; it also increases the efficiency of all operations, reduces human errors and operational costs, provides safer data storage in the cloud and enables data analysis. In the current commerce climate, without digital technologies companies would not get even close to the level of data analysis the market needs to keep moving. However, to enjoy the perks of e-commerce, a digital presence is the most important trend to keep up with and develop. Online marketplaces are now filled with options for the customers to decide, each providing better rates and discounts than the next.

In China, over 50 percent of the sales are made through live shopping interaction. This tool allows businesses to reduce the gap between traditional retail stores and e-commerce platforms. Live shopping offers a real-time broadcast where businesses

showcase their products through different digital channels, such as their website, social networks or marketplaces.

“When we take this physical experience to the digital world, we can offer the advantages of both sides. It is expected that by 2026, over 20 percent of the total global sales will be made through a live shopping experience,” said García. This is why marketplaces play such an important role within digital commerce. For users, it is extremely convenient to be able to compare all available options within one place, which is why over 50 percent of the digital sales take place within marketplaces.

Inside the e-commerce world, there are key players who are collaborating to obtain better results and provide comprehensive platforms to manage their entire supply chains, having their entire system layout, including suppliers, warehouses and beyond, mapped in a single place. “Thanks to the pandemic, we learned that there is strength in unity. By 2024, marketplace sales are expected to reach US$3.6 trillion,” said García.

Customers expect same day delivery to the disadvantage of companies without the logistics to provide this service. Clients increasingly value their ability to measure the time it takes to acquire and receive a product or service. They also have less time available to shop around, so it is critical for companies to provide clients the information they want. “The world is used to immediate interaction. If I want my digital system to be chosen over others, I must be able to offer an immediate experience, while reducing the conversion gap in the purchase,” said García.

To remain relevant, businesses must forecast how the clients will interact with them in the next few years, added García. Forecasting potential trends is key to ensure that the company will be able to adapt to the new demands. Companies need to collaborate with the strongest marketplaces to create an integral ecosystem for their customers, who are seeking the shortest waiting times available and the best experience when buying.

HOW WILL CONSUMERS SHAPE THE FUTURE OF RETAIL?

The retail sector faced the digitalization boom as a mandatory step to remain part of the market after the pandemic hit. Businesses with an online presence found themselves in a good position to continue to generate revenue and attract customers, while those that neglected digitalization disappeared. Business digitization has become a minimal requirement for companies, agreed experts.

COVID-19 pandemic came to show organizations that physical stores had power but that they were not an efficient tool to really understand their client”

Juan Montes

“The COVID-19 pandemic came to show organizations that physical stores had

power but that they were not an efficient tool to really understand their clients,” said Juan Montes, Country Head, SAP Customer E xperience.

Globally, 94 percent of companies are planning to invest in technology during the remainder of 2022, according to Adyen. If this accelerated technology adoption is carried out correctly, the retail sector could add 4.7 percent to its growth rate over the next five years. For this transition to happen and to make the best out of the current opportunities, customers must be kept at the center. “Digital transformation forces companies to transfer the attention from the product to the client, which is where it has to be,” said Kelly Kroger, CEO, C &A México.

Today’s businesses not only have to have a digital platform that makes it easy to get their products; they also have to generate a unique user experience and constantly

“The

Country Head | SAP Customer Experience

incorporate customer feedback to stay one step ahead. “ r etailers did not enter the market as tech companies, but today, all companies have to be seen as techenabling organizations,” said Daniel Navas, Co-Founder and CEO, Mora Mora.

Despite the numerous challenges posed by digitalization, customer experience has to be kept at the center. retailers must also face the blurring of the physical and digital worlds to map how this new way of living will affect the future of shopping. “Physical stores are not going to die. This over dimensioned fear that arose during the pandemic is not real. I expect a future of unified commerce but changing the concept that physical stores have today,” said Benjamín Santa María, CoFounder and CEO, reversso.

To address customer needs, the lines between the online and offline world must disappear to offer a complete experience. Technology should also be seen as the catalyst that drives people to physical stores. “We can use physical stores as a communication and educational tool,” said Kroger.

However, there are some challenges ahead such as tackling security issues so customers can enjoy the shopping experience without worrying about their money’s safety. Physical and online stores belonging to the same brand are also increasingly finding themselves competing against each other, to the detriment of sales and clients. “Organizations do not have to boost a competition between physical and digital stores because the client is the one who is affected by this. Companies have to

implement a structure to homologate the customer’s experience,” said Montes.

Aside from increasing conversion rates and improving the customer’s experience, a strategy that addresses both physical and digital stores can become a window of opportunity to create an evolving brand image that engages Gen Z and allows retail to reach unforeseen levels. “ younger generations choose to enter a physical store from their homes after seeing the brand on their phones,” added Kroger.

For companies to succeed in this process, they have to pay attention to their catalogs to ensure that the client receives the price and quality they are expecting. Companies should also understand how to control the customer’s experience from the moment that users know of the brand to the moment the product arrives at their house. Finally, organizations have to learn to understand what the user is looking for to start customizing the shopping experience. “These strategies have to be implemented by retailers; however, the challenge now is to use the technology correctly to predict the future behavior of users,” said Alejandro Sisniega, Co-Founder and Chief of New Business, Justo. “Stores that do not have the technology implemented yet; they continue to only see transactions without linking the behaviors of their clients. Consequently, they do not know their users,” he added.

“When we get to know our consumers and their relationship with our brands, we will be able to improve the experience we offer to benefit companies,” said Santa María.

COLLABORATION TO RECONCILE ECOMMERCE DEMAND, SUSTAINABILITY

While e-commerce consumer demand was apparently heading towards market correction after COVID-19 restrictions were lifted, demand and accompanying delivery expectations are expected to pickup and continue growing incrementally. This poses an important challenge for stakeholders attempting to augment repurchase rates and magnify their logistical delivery capacity while attempting to curb carbon emissions. To accomplish these seemingly contradicting objectives, industry stakeholders stand to benefit from a collaborative approach, according to industry leaders.

“ r econciling seemingly exponential demand with sustainability objectives requires collaboration between the industry stakeholders,” said Andres Archilla, CoFounder and COO, Melonn. “Moreover, the government has an important role to support the continued growth of this industry through the development of incentives,” he added.

models to improve fulfillment processes. Nowadays, consumers demand fast and cost-effective delivery options, which are now key to retaining customer loyalty to online stores. However, last-mile delivery processes continue to present problems for the retail industry given their relevance and continuous need to grow.

Same-day deliveries, management of damaged products and route optimization are some of the few ways retailers and online businesses are trying to optimize their systems to cater to their customers. According to Statista, “more than 61 percent of logistics companies said last-mile delivery is the most inefficient part of their entire supply chain. If customers are unsatisfied with the shipping service, almost 56 percent of customers will not buy from that brand again.” In this sense, customer satisfaction can be linked to speed, timely delivery and accuracy. As stated by a Capgemini r eport, 63 percent of consumers prefer online deliveries over physical stores due to overcrowded spaces. The challenge appears to be correlated to high levels of competitiveness and consumers’ high expectations in this regard. Modern customers prefer e-commerce and retail stores that fit their lifestyle.

r estrictions imposed by the COVID-19 pandemic forced even the most reluctant Mexican consumers to recur to e-commerce and marketplace platforms, shortening the projected growth of this industry sector by years. Even after this initial industry jolt, e-commerce adoption is expected to remain at 69 percent with an average purchase ticket of over MX$1,500 (US$76.6), according to Forbes Mexico. Moreover, to keep up with growing customer demand and the fast pace at which the market is evolving, companies are adopting new technologies and experimental supply chain

This understanding has actually moved companies like Mercado Libre, Coppel and Amazon to eat delivery costs and cut into their profits to gain a greater market share–and it has worked. However, this is not a model that every business can put into practice, begging the question: “At what point do companies choose to take on delivery costs between choosing to pass it on to end consumers,” asks Antonio Arranz, General Manager, DHL Express Mexico.

Additionally, from the business perspective, last-mile problems are usually caused by inefficient delivery methods or logistics, including limited visibility and missed delivery times. Solving these issues requires

“The government has an important role to support the continued growth of this industry through the development of incentives”

Andres Archila Co-Founder and COO | Melonn

innovative transportation methods, route optimization and strategies to get goods from distribution centers to their final destination as quickly and efficiently as possible.

“Data analysis has already played an important role helping organizations develop and choose among more efficient delivery routes; however, networking between platforms stands to expedite this process,” said Daniel Colunga, General Manager, Uber Eats Mexico. Other innovations include the development of micro-fulfillment centers as a means of physically getting closer

to end-consumers. These centers are accompanied by challenges of their own but could help retailers move from shipping to from-store delivery, he added. In the meantime, companies can turn to pricing options that can serve to help companies monetize and help abate demand volumes, suggested Archilla.

As the deadline to meet net-zero objectives approaches, companies must also consider the lack of EV infrastructure in Mexico which has been largely neglected by the federal government, observed Edvard Pettersen, Country Manager, Pickit Mexico.

FINTECH: A NEW SOLUTION TO OLD PROBLEMS

Mexico has become one of Latin America’s largest fintech hubs, driving a cashdriven population to adopt banking at unprecedented rates. Mexican businesses, however, often face difficulties because the country’s credit issuing and lending capacities have astronomically high loan rates. Fintech solutions, which are entering the market at high speeds, could help companies obtain the credit they need. Unfortunately, they currently focus on expanding consumer finance. In this scenario, possibilities stay wide open for solutions to impulse SME credit issuing and lending, which will ultimately help the country’s economy.

Digital credit and microfinancing have proven successful in Mexico because SMEs often have limited access to other choices for credits or loans. These emerging tools do not necessarily rely on traditional debt collection models, which rely in turn on the legal system and courts. Instead, microloans often prefer to provide various incentives for good payment behavior and to penalize clients who do not repay on time. This new model could directly affect the promotion, development and creation of new businesses. However, most of the new fintechs in Mexico have focused on making credit available to direct consumers, which is helping close only a part of the credit gap.

“A primary way to accelerate access to credit in Mexico is by partnering with thirdparty distributors to set up white-label credit and banking services. With (Bankingas-a-Service) BaaS, it is a win-win situation for both the (financial institution) FI and the SME. FIs benefit from additional revenue streams, while brands are able to deliver accessible banking and credit services to the 85 percent of Mexicans who do not have access to credit cards,” wrote Jim McCarthy, President, i2c Inc ., on MBN.

“Companies face difficulties in obtaining large credit amounts, this is where the flexibility of fintech companies play an important role, because digitization allows us to obtain better results than the traditional banking system,” said Alejandro Villalobos, Managing Director of North LATAM, Cumplo Mexico.

Fintechs must aim to redesign financial systems to address their current limitations, especially by offering a personalized service that is based on each customer’s demands, said José de la Luz López, Co-Founder and CEO, Delt.ai.

Enrique Presburger President | ASOFOM

Undoubtedly, new technologies have the potential to improve SMEs’ finances, even in the context of weak credit market infrastructure. Fintech innovations like online lending, including platform lending and crowdfunding, stand to reach business clients that banks have been unable to serve. Technology has an important role to play in transforming this critical market infrastructure, but it will require investment and attention. r eform in these areas is complicated and time-consuming but is indispensable for long-term progress.

Data: The Tool Behind Fintech’s Solutions

It was critical for Mexico to find new solutions so companies of all sizes could easily get loans without having all necessary requirements that traditional banking demands. At the moment, the non-bank financial sector is facing its most accelerated growth since its creation. Since the COVID-19 pandemic, it has gained terrain over the traditional banking institutions, but there are many issues that need to be addressed for it to grow res ponsibly.

The technification of SMEs has reduced the financing gap, as they now produce more data that can be used to create new solutions for these companies. The significant discrepancy in the survival rate of SMEs and large companies is that bigger corporations tend to have access to mortgage guarantees, but this does not necessarily mean that they are the most productive.

role of the Public Sector

“The government wants to regulate the process of money management, it wants to ensure the trajectory of these movements to avoid money laundering and tax evasion issues,” said Cristina Cacho, r egional Director, Clara. Collaboration with public institutions is critical to help a customer to offer a direct and comprehensive service, thus allowing companies to have a better management of the accounting of a company, she added. To achieve this, regulations must be designed to favor all parties involved and the end user.

r egulations play an important role in the present and future of fintechs, which is why the public and private sector must work hand in hand. “Sometimes, the law does not know how to classify us. Authorities have to get to know us, understand us and classify us, so we can contribute to public policy,” said Cristina Valero, Vice President Card Product, Konfío.

“If there are too many regulations within a market, they cause specialized financial institutions to face too many hurdles to be able to provide better services”

The Law to regulate Financial Technology Institutions was approved in 2018 and, despite the fact that it was innovative for its time, it needs to be reviewed to address more aspects, explained Enrique Presburger, President, ASOFOM. First, it should focus more on incentivizing innovation instead of taking a punitive approach. Second, it should broaden its scope to allow the important players in the industry to be heard. Finally, it should foment the development of more technologic al tools.

“If there are too many regulations within a market, they cause specialized financial institutions to face too many hurdles

OPTIMIZING PAYMENT

to be able to provide better services,” said Presburger. If these problems can be solved, it would allow the Mexican businessman to focus exclusively on growing their business, allowing both Mexico and Latin America to make an accelerated economic leap and even leveling the field with other major global e conomies.

Despite the issues surrounding the Mexican financial system, fintech companies can solve these complex problems with the limited resources that they have available, said de la Luz. These companies can find alternatives to help the region through technological development.

AUTHORIZATION

Consumers now expect a simple, convenient and streamlined online shopping experience, so merchants are striving to catch up. To provide an enriched shopping experience, an efficient and safe payment process is key. If the payment process is difficult, customers will quickly switch to another seller, which is why it is essential for platforms to balance optimal authorization rates with fraud prevention.

“Around US$18 billion are lost due to the abandonment of shopping carts. This situation occurs because the consumer does not trust the checkout, the process is not friendly, extra distribution costs are added or the user is forced to create an account,” said María Paz Olaso, Vice President of Sale s, dLocal.

RATES, FRAUD PREVENTION

The future of commerce relies on generating and perfecting a unified experience. The easier it is for a customer to acquire a product while not wasting precious seconds during the payment process can add value and generate repeat sales for online merchants. “The more transparent the process is for both businesses and consumers, the greater the probability of making a purchase. In addition, an added value or a superior benefit must be offered,” said Pedro rivas, General Manager Mexico, Mercado Pago.

The COVID-19 pandemic brought several opportunities. “Prior to the pandemic, 50 percent of the transactions were made with a debit card and the other half were made with a credit card. However, after the

pandemic, about 70 percent of transactions are linked to debit cards,” said Christian Leon, Managing Director Latin America, Signifyd.

E-commerce’s skyrocketing growth took many sellers unprepared but created opportunities for companies willing to look for new ways to facilitate this process. “We created more products to facilitate the interaction between individuals and digital providers. We granted credit so people could have access to the consumption levels they were used to before the pandemic,” said rivas.

E-commerce now seems here to stay. “Many people changed shopping habits. More than 50 million people who bought online for the first time maintain that behavior,” said Paz. But while the practice brought numerous opportunities, it also exacerbated existing problems such as fraud, which has reached record highs. “During the pandemic, Mexico increased its level of e-commerce participation and started to present itself as a country that is becoming digital. However, this also brought opportunities regarding fraud prevention,” said Erick Mckinney, Country Manager, Adyen.

This fraud-prone environment is making some sellers nervous. “The relationship between fraud and conversion generates a lot of mistrust today. There is a huge opportunity for collaboration and consumer education,” said Diego Creel, Senior Vice President LATAM, Incode.

Payment service providers are justifiably obsessed with beefing up their defenses against fraud but preventing this practice is not necessarily straightforward. “The main challenge to avoiding payment fraud is not differentiating between good and bad transactions, but differentiating between what needs a human to review and what does not. Ideally, it would be best if companies automatically accepted as many transactions as possible, reviewing only a relatively small number,” according to fraud prevention platform Seon.

While the situation may seem dire, businesses have a growing host of options available to them to prevent and fight fraud. “Thanks to smartphones, today’s businesses have a lot of information to know the risk profile of their consumers,” said Paz.

Fraud is not the only growing challenge, however. “The acquisition cost has increased a lot; the delivery experience is increasingly demanding and users are continually looking for new experiences. Businesses are under these pressures, but the checkout is where these processes can be optimized,” said Leon. “The checkout experience is essential to gain the trust of the user so they buy again,” added Creel.

The optimization of payments and the improvement of customer experience can help companies increase revenue and improve their network acceptance rates. For this reason, numerous SMEs are planning to increase their investment in technology and securit y by 2023.

“There are alternative payment methodologies emerging and 80 percent of people are willing to try them. For example, in Asian countries, payment

with facial validation has become very common,” said Creel. “The world is moving toward linking identity and payments.

This not only leads to less transaction friction and fraud but it also creates trust,” he added.

WHY DOES LATIN AMERICA HAVE SO MANY FINTECH UNICORNS?

Despite Latin America’s constant political turmoil, expanding social unrest and shifting government economic policy, the region’s entrepreneurs continue to rise and excel at business development, reaching the desired Unicorn label. The most common trend in this wave of entrepreneurs has been fintech development, which has become one of the most popular products in many developing nations as regular banks struggle to attract more clients.

“There are many conditions for these unicorns to be born, including the size of the market, the highly neglected segments and the many entrepreneurs to take advantage of the opportunities to close gaps”

Sergio Almaguer Founder and CEO | Yaydoo

Until recently, Latin America was an untouchable region for investors due to social and political instability and lack of technological development. Nonetheless, the capital today for fintech projects is fluent and abundant, said Bárbara González Briseño, Mexico Country Manager and CFO, Bitso. Good ideas and talent emerged in part thanks to the possibility of remote work, which opened opportunities for many entrepreneurs, she added.

“The financial services sector has been notoriously slow to evolve. Still, the pandemic forced incredible digital acceleration, becoming a tipping point for institutions, SMEs and even the government to embrace fintech and invest in infrastructure,” according to Silicon Valley Bank.

Consumer behavior has also become an incentive for developing this new financial branch. In 2021, 56.7 million Mexicans aged

18 to 70 years old, representing 67.8 percent of the population, had some type of formal financial product such as a savings account, credit, insurance or Afore, according to INEGI’s National Financial Inclusion Survey (ENIF). While this figure is similar to 2018’s indicator, it decreased by 3.3 percentage points in the case of women.

Due to a lack of competition and historically stringent credit requirements, Latin American banks typically only served affluent individuals, which is the sector’s modus operandi is changing, said Sergio Almaguer, Founder and CEO, yaydoo. Financial inclusion in Mexico and Latin America has grown slowly, creating opportunities for disruptors. Fintech, which seeks to provide access to economic services in a simpler way than banks, continues to gain popularity.

Between 30-50 percent of the population of major countries in Latin America remains underbanked, according to Silicon Valley Bank. This means there is a large overlooked market waiting to be addressed, said Álvaro r odríguez Arregui, Co-Founder and Managing Partner, IGNIA Partners. In addition, “there are many conditions for these unicorns to be born, including the size of the market, the highly neglected segments and the many entrepreneurs to take advantage of the opportunities to close gaps,” said Almaguer.

Furthermore, the quality of Mexican entrepreneurs has proven to be worldrate and the country is becoming more sophisticated, another reason why investors are choosing to come to Latin America and Mexico specifically. “Latin America is producing entrepreneurs with a lot of potential, who are also committed to solve important issues,” said Vincent Speranza, Managing Director, Endeavor

México. Nevertheless, the ecosystem needs to work on inclusion, diversity to expand its horizons and reach a wider public beyond Mexico City, added Speranza. Moreover, the sector needs

to work on profitability and ESG, create healthy companies that foment success for everybody and address the mental health issues of founders, who usually struggle with stress an d burnout.

DELIVERING HYPER PERSONALIZED CX BY ORCHESTRATING E XPERIENCES

As the retail and service business continues evolving, competition between companies continues increasing. By altering everything from product and experience development to customer service, companies aim to create the ultimate customer experience (CX). In the current hyper personalized landscape, companies must have a customer-centric approach, which is only possible through the orchestration of the customer experience, which in turn is only possible through the orchestration of all selling and communication channels.

“Companies must innovate within the experience. The goal is to create natural user experiences based on identity. This is only possible through the orchestration of different technologies, the application of exponential technologies, such as AI, and a customer-centric approach,” said Óscar Parra, Managing Director México, Genesys.

Customer centricity focuses on providing positive CX before, during and after the sale to drive repeat business, enhance customer

loyalty and improve overall business growth. “Sixty-five percent of people trying to buy something online abandon their cart for two reasons: 60 percent of them due to price issues and the other 40 percent due to difficulties in the interaction with the organization. It is all about CX,” said Parra.

Customer service teams must understand the client’s issue and address it, not only when they are facing difficulties but throughout the entire sale process. A customer service team could inadvertently make situations worse if the service is slow and ineffective. If the customer reaches a company through one channel, provides relevant information and this data is lost due to miscommunication between channels, the client will be frustrated and the customer service team will take longer to resolve the query.

During purchase processes, clients interact with different channels, such as brick-andmortar shops and e-shops. Also, when they contact customer service, they can do it

through several channels from phone calls to emails, WhatsApp or website chatbots. Companies usually grow in silos, from technology and in-house processes to sales and marketing, said Parra. This uneven growth creates great divisions and the different channels isolate from each other, he explained.

“Sixty-five percent of people trying to buy something online abandon their cart for two reasons: 60 percent of them due to price issues and the other 40 percent due to difficulties in the interaction with the organization. It is all about CX”

Óscar Parra Managing Director Mexico | Genesys

“Currently, connectivity between different channels, from phone calls to digital channels, is crucial. When I call an organization and then send them an email, the company does not know who I am and what the issue is. Unsynchronized channels disconnect communication with the client,

but also disconnect the people who work within the organization. Companies must give customer service workers the tools to respond appropriately,” said Parra.

Genesys is a global cloud leader in customer experience orchestration. Every year, it orchestrates billions of “remarkable CXs” for organizations in over 100 countries, according to the company. Genesys leverages cloud, digital and AI technologies to take its vision of empathetic CX at scale. Through Genesys, organizations can deliver proactive, predictive and hyper personalized experiences to deepen their customer connection, said Parra.

In the context of today’s highly competitive landscape, added value is not only created through good products or services, but also by leveraging advanced technologies and providing the best CX through a customer-centric approach, concluded Parra: “ you will not be able to focus on the customer if you cannot orchestrate their ex perience.”

LEVERAGING THE CLOUD TO EVOLVE ALONGSIDE THE MARKET

The agility and flexibility of cloud services allowed Mexican companies to adapt their business models to the undeniable rise of a digital economy that necessitated an accelerated route-to-market during the COVID-19 pandemic. The observable success of early adopters has cemented the role of cloud computing in business strategy formation, which should seek alignment with the company’s business model so companies can effectively evolve alongside the market, according to industry leaders.

“Cloud migration is not an overnight accomplishment, as discovered by premature adopters. The identification of business opportunities should precede the selection of a cloud service provider to verify that it coincides with its business model,” said Sergio Sánchez, Country Manager and LATAM Sales Lead, Snowflake.

The way companies look at cloud services is changing more rapidly than ever given the potential for exponential digital growth these services enabled during the pandemic. The technological sector and companies continue to incorporate the cloud into their business operations and, with it, a whole transformation that leads to modernized solutions. Through the transition, organizations are transforming themselves into digital businesses, as IT leaders become catalysts for change by modernizing solutions enabled by cloud technology. Beyond savings and an accelerated routeto-market, companies with cloud computing services have discovered that “they can also test consumer-facing products and services faster and augment processing and storage capacity as needed,” said rodrigo Martinelli, Vice President and General Manager LATAM, rackspace Technology.

Altogether, “cloud computing is essentially a leverageable asset that allows companies to

transform customer experience, increase their market reach, discover additional business avenues and reconfigure their business models correspondingly,” said Óscar Parra, Managing Director Mexico, Genesys.

On the other hand, consumer and enterprise tolerance regarding technology’s responsiveness and effectiveness has lowered since the beginning of the COVID-19 pandemic, said Alexis Langagne, Senior Vice President, Softtek USA. Users now expect immediate satisfaction and fewer problems, representing a new problem for companies trying to integrate a new digital reality. The longer companies take to incorporate cloud and other digital solutions, the stronger competition becomes, making it more difficult for companies to target newcomers. This has created a sense of urgency among laggards; nevertheless, this is not a process that should be approached haphazardly, industry leaders agreed.

“Cloud migration should be done in stages to avoid unnecessary costs, circumvent security risks and allow operating talent to build up the necessary skills to operate, maintain and freely manipulate cloud infrastructures,” said Sánchez.

Talent is often overlooked, but primarily important considering that the slowest part of a company’s modernization process is often its workforce, which serves to underline the importance of changemanagement. Consequently, the longer it

takes for a company to migrate towards cloud computing, the longer it will take for the organization’s talent to close an already widening knowledge gap. Meanwhile, early adopters with experienced talent are already considering multi-cloud infrastructures as a means of diversifying their assets across platforms, said Martinelli. However, despite counting with the intelligence and knowhow, many companies lack the manpower to implement their strategies, an existential problem plaguing companies across industries.

“A lack of specialized talent is one of the greatest challenges to cloud migration in the country, and it is likely limiting the growth potential of companies across industries,” said Martinelli.

Mexico and Latin America are at a unique inflection point and have the potential to become global centers of technology development and innovation, a realization that rests on public and private efforts to generate the talent needed to bridge the gap with other global technology leaders. As such, companies should also be attempting to anticipate how they will adapt their cloud infrastructures to the rise of emerging and disrupting technologies like blockchain, web 3 and the metaverse, among others. The capacity to anticipate their impact will help companies gain greater clarification on both their business models and their supporting digital infra structures

THE BRIGHT FUTURE OF DATA-DRIVEN BUSINESSES

More and more businesses are becoming data-driven, providing a new and better way for business leaders to make decisions. Data-driven decision-making and management are allowing modern businesses to unlock value and create new opportunities based on data.

“More data has been generated in the last two years than at any time in history. In an automotive plant, 2,200 terabytes of information are generated per month.

This is equivalent to 500,000 movies on Netflix,” said Alejandro Preinfalk, President and CEO of Mexico, Central America and the Caribbean and Senior Vice President of Digital Industries , Siemens.

“Transition to the use of data can really add value. It is not only about having the data, it is about knowing why you have it and how you are going to use it”

management can even transform companies into actors that improve life quality and even save lives. For example, by sharing data with the public sector, emergency services can respond faster to emergencies. “Waze receives accident notifications faster than government entities. By sharing this information with them, we have helped to optimize the time in which an ambulance arrives at an accident,” said Avilés.

Alliances and the use of data can accelerate the development of solutions that provide widespread benefits, such as supporting the fast development of the COVID-19 vaccine. “Siemens worked with pharmaceuticals that developed the COVID-19 vaccine. During this time, we managed to develop the formula and distribute it in less than a year,” said Preinfalk.

Sergio Dueñas Chief Digital and Growth Officer

| GBM

Data analysis can make the company more productive, competitive and efficient, allowing organizations to reduce human error, avoid costly mistakes and save time and resources. “Data management allows for better decision making, allowing us to focus on the customer and to boost innovation,” said Ingrid Avilés, Country Manager, Waze.

Moreover, capitalizing data can generate new business opportunities, increase sustainability and open the door to more markets. “Data-driven businesses can increase their productivity by up to 40 percent. Data management also increases efficiency, agility, flexibility and predictive maintenance, allowing the use of new technologies, among other benefits,” said Preinfalk.

Additionally, data allows global companies to have a local approach and adapt their services to the needs of specific markets. Data

However, done incorrectly, this transition can create potential weaknesses that expose the business to risks. For that reason, data protection should not be treated as optional. “Data protection is a need for users and an obligation for companies. It needs to be based on a regulatory framework,” said Sergio Dueñas, Chief Digital and Growth Officer, GBM.

Companies that manage large amounts of data should always prioritize security, as mishandling sensitive data could hurt both the business and its clients. “Poor data management harms organizations. In Latin America, there are 35 attacks per second and in 2021, cyber damage amounted to US$6 billion,” said Preinfalk.

If done right, businesses can use data to expand their customer base, grow their operations and increase revenue. So why are companies not realizing the full potential of their data? The most common reasons are slow data transmission, ineffective data analysis, inadequate risk management systems, budget limitations and securing executive buy-in. The lack of talent and technological gaps in Latin America are also hampering the digital transformation.

“In Mexico, we have had a delay in digitization. Mexico is a country with a marked idiosyncrasy that is based on the fear of digitization, the use of cash and traditional behavior. To generate data, people must be part of the digital ecosystem,” said Dueñas. Companies of different sizes also move at different speeds when data is involved. “The digital transition represents a lot of work. Things are changing fast and SMEs do not always have the capabilities to adapt to the changes of regulations,” said Ferdinand León Meister, Director Latam and Iberia, SentiOne. However, SMEs’ smaller size also provides them with some perks. “Compared to other companies, SMEs do not face many problems to adopt a data driven culture, as they have a simpler structure,” added León.

For all companies to succeed in the effective collection and use of data, they have to find

the balance between a centralized and a decentralized strategy. “Decentralization is important to increase companies’ business value,” said León. It is also important for directives to take the lead in the transformation in the mindset and vales of the business. “The culture of a company allows organizations to enter the digital transformation as it is a change in the business model, not a technical transformation,” said Preinfalk.

However, experts agree that the responsibility to boost this transformation does not lay only on companies; individuals, companies and communities have a responsibility to facilitate the transition and leverage data in favor of all actors. “Transition to the use of data can really add value. It is not only about having the data, it is about knowing why you have it and how you are going to use it,” sa id Dueñas.

DATA MANAGEMENT PRIORITIES: PRIVACY, SECURITY AND RESILIENCY

The ongoing digital transformation is impacting businesses across the globe. Data is now being reckoned as the new key driver to streamline businesses, customers, processes and systems, while also contributing to intelligent decisionmaking. However, this data economy is also exacerbating threats, with cybersecurity attacks hitting record highs in recent years. Companies that want to embrace the benefits of data should also be prepared for its challenges, agree industry experts.

As companies continue to carry out their digital transformation journeys, they increasingly need to invest in data analytics and business intelligence tools to process extensive datasets and make the right business decisions. “Companies that do not know how to use data will face more and more challenges down the road. SaaS, AI and machine learning (ML) are becoming essential to virtually all businesses, regardless of the branch, line of business or industry in which

they work,” said Eric r ossati, Area Vice President Latam, DocuSign.

“Managing enterprise data helps organizations define and develop processes, standards, architecture and tools that help to store, standardize, govern, secure and harness the value of the enterprise data assets,” according to Deloitte. New technologies using ML, natural language processing and advanced analytics can help fix many data problems without the need for large-scale investment and company-wide upheaval. In fact, such technologies are already being used and they also can help reduce the cost, effort and risk associated with digital finance transformation.

As companies generate more and more data, teams have seemingly limitless opportunities to glean new insights and boost their value. Data has become the jewel in the crown for companies, giving them the ability to look in the rearview mirror to analyze the behavior of their users to determine future actions and forecast emerging trends. To keep pace with these trends, security becomes essential.

Cloud Services and Data Protection

Companies that are successfully capitalizing on data are becoming business leaders, but data protection services in the cloud are becoming critical as cyberattacks are skyrocketing. Data is everywhere. Market intelligence firm IDC forecasts that 55 percent of organizations will have a cloud-

based data protection strategy by 2025, said David ruiz, Analytics, Data and AI/ML Lead, Google Cloud.

Having impenetrable systems is unfeasible because cyberthreats update and evolve daily and many strategies to create new defense mechanisms depend on reactive actions. While it might be impossible to have 100-percent safe systems, there are enough tools available on the market for a company to adequately protect its data, said José Andrés García, regional Vice President, Iberia and Latam, Denodo.

However, most companies are not cybersecurity experts and could benefit from leaving security matters in the hands of a capable partner, who should be an expert as they would be responsible for sensitive information. For that reason, companies should carefully consider potential partners to find one they can fully trust. This trust can be paid forwards, as clients are also more likely to choose reliable businesses for their needs. “We are moving toward a focus on care and trust. Cybersecurity builds trust,” said rommel García, Partner of Cybersecurity Services, KPMG México. For this reason, companies are increasingly enlarging their cybersecurity budgets, as user data leaks are being severely punished in both financial terms and in brand reputation. The consequences are dire enough that privacy security, data management and data ethics should be on the agenda of all corporate CEOs, explained rossati.

The user should also have full control of the information that companies have, use and share. Customer trust is the most important asset that a company has. If lost, the company loses its value since it can no longer provide the most fundamental aspect of service. “Companies must ensure they clear all security levels at all times, everywhere,” said ruiz.

An emerging cybersecurity trend is information continuity based on instantaneous recovery capability, as it allows the operation to have fewer points of failure due to the existence of more safety points. Large companies need to integrate different services such as data fabric and data mesh to address new demands.

TAAS REQUIRES BUSINESS ATTENTIVENESS TO PIVOT ON DEMAND

Due to the rapid technology advancements and the need to quickly replace obsolete goods, organizations are increasingly turning to Technology-as-a-Service (TaaS) to stay competitive and agile in the marketplace. This incredibly competitive market is forcing companies to seek to differentiate themselves by offering a unique consumer experience, using data analysis to find areas of opportunity and allowing for present barriers to inform investment and business decisions, according to industry experts.

“Ultimately, the most important aspect of a TaaS business model is the perceived quality of an end-user’s experience. This implies that businesses should base their decisions and technology investments on both usergenerated data and internal data analysis,” said Desmond Mullarkey, Head of revenue and Growth LATAM , Stripe.

Unlike traditional acquisition methods, TaaS allows users to access the technology

while it is useful and replace it at will, providing added flexibility and scalability as organizations grow or change. About 70 percent of the global economy has shifted towards the “as a service” model, and this percentage continues to grow worldwide, according to LinkedIn. As the service shift sweeps across all corners of the economy, it brings both opportunities and threats to companies that produce and sell technology products. For companies to continue succeeding, hardwarebased product companies must undergo software and service transformations that require new approaches to technology development, delivery, commercialization and consumption.

Nonetheless, companies should be seeking to take direction and learn from existing obstacles “to help them develop differentiating elements to their services. However, companies should be careful to identify the limitations of their

capabilities and establish a budget cap so that they do not die along the way,” said y tzia Belausteguigoitia, Co-Founder and CEO, Troquer.

“To help them develop differentiating elements to their services. However, companies should be careful to identify the limitations of their capabilities and establish a budget cap so that they do not die along the way”

Ytzia Belausteguigoitia Co-Founder and CEO | Troquer

A TaaS-based business model uses software to increase its functional versatility, leveraging the ecosystem to expand the scale of value created for the customer. However, the world is still attempting to determine at what point this model can be beneficial and in what areas. While some aspects remain undetermined,

market indicators and trends suggest that everything can effectively become a service. If this is the case, does the “Everything as a Service” model have the potential to continue to expand? If so, what benefits will it bring to the country?

Although there is a lack of consensus, it is clear that the success of these models “is contingent on a company’s ability to synthesize the greatest number of digital processes and transactions in the most clear, efficient and productive manner,” said Nicolás Knockaert, Co-Founder and COO, Houm.

Fundamental to this process is the collection, generation and retroactive analysis of data from both consumers and its technology core. This will help organizations identify areas of opportunity and trends in real time so companies can move and adapt in lock-step to a constantly evolving market, industry expe rts agree.

THE 2030 SUSTAINABILITY AGENDA RELIES ON COLLABORATION

The UN 2030 Agenda aims to draw the path towards a sustainable future by strengthening peace and assuring global prosperity. However, the hostile international context has hampered this journey and the achievement of the Sustainable Development Goals (SDGs) is far from becoming a reality.

To face this scenario, companies play a key role as promoters of sustainable practices to progress towards a greener reality.

“Companies have to take a look at their DNA and embrace actions to advance environmental sustainability,” said Daniel r íos, AVP External Affairs and Sustainability, AT&T.

The pandemic posed challenges to the achievement of the 2030 Agenda. Scientists have even mentioned that the “transformation” brought on by the Goals has been mainly rhetorical. Data collected so far shows that years of development have been set back due to the pandemic. For example, for the first time in 20 years, the working poverty rate increased in 2020.

It is also expected that gender parity in managerial positions will take over 100 years to be achieved, as female workers were more affected by the pandemic, as reported by the International Labor Organization.

In 2021, Mexico had a compliance index of 70.4 with the SDGs, according to the UN. “Mexico’s participation in different international forums gives us hope that the country is committed to taking environmental action. However, all sectors must be involved in this,” said Ignacio González Quirasco, Sustainability and CS r Director, Chedraui. The country’s main challenges are linked to the reduction of inequalities and the generation of inclusive growth and decent jobs. The country also has to address industrial innovation and infrastructure, the life of land ecosystems, peace and justice and generate solid institutions, reported the UN. “The 2030 Agenda for Sustainable Development has inaugurated a new era of global development marked by an imperative to integrate social, environmental and economic objectives,” wrote Ulises Neri, Vice Chair, UN, in MBN.

The public sector’s limited support of private industries is also slowing Mexico as the country strives to achieve its sustainable goals. Mexico is in a complex environment regarding regulations of green and renewable energies. “Government policies are not favorable right now. We can and have to continue our efforts toward a greener world despite contradictory policies,” said Felipe Villareal, CEO, Alian Plastics.

To face this problem, experts agree that companies have to rely on partnerships to have a truly positive impact and speed the achievement of SDGs. “Change is about a partnership between stakeholders and enterprises. Stakeholders set expectations and enterprises lead with innovation,” said Peter Harris, Vice President of International Sustainabi lity, UPS.

“Governments, corporations and the civil society cannot achieve SDGs by themselves, we need to collaborate. There is a shared responsibility to achieve the 2030 Agenda,” said ríos.

Achieving sustainable development in Mexico implies having the mechanisms and tools that allow companies to measure progress and improvement opportunities.

Above all, it requires a common purpose that must be based on agreements and serious commitments from all sta keholders.

The SDGs set a benchmark that companies can use to “help them to adjust and articulate their business models, identify opportunities for improvement or find new market niches, but these benefits or efficiencies should not only be accounted for the company but for society as a whole,” according to the UN.

Innovation is an essential element to speed up this process as technology is one of the few things that will help countries reach the 2030 objectives faster. “Innovation is the weapon we all have to rely on,” said Karen Mora, Sustainability Director, FUNO. It is also essential to include all types of businesses in this process, no matter their size or purpose.

“We need to close the digital gap in Mexico. We need to promote digitalization of small businesses: they are the backbone for GDP development,” said ríos.

Aside from benefiting the environment, the implementation of these strategies will allow businesses to meet the demands of consumers, which are urging for more transparency regarding the sustainable practices that companies implement. “Consumers decide which companies to approach depending on their responsibility toward the environment,” said Villareal. “If we do not address the expectations of customers, we face the risk of losing our connection with them,” said Harris.