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Innovation and disruption in Latin America: “SMEs must join integrated digital ecosystems”

New study from the gA Digital Transformation Center
Miami, julio de 2017 –gA, global leader in Digital Business Transformation, has published its second study on Digital Transformation under the title: “Digital Ecosystems: Innovation and Disruption in Latin America.”

According to Raúl Katz, co-author of “Digital Ecosystems: Innovation and Disruption in Latin America” and Director of the gA Center for Digital Transformation: “In economic terms Latin America needs digitalization in order to continue growing and achieve parity with the leading economies in the world. The transformation process will occur first in those industries whose structure and value chain are best suited to the incorporation of disruptive digitalization “.

The latest study indicates that in order to adopt digital technologies successfully, companies must restructure their organizations, reorganize business processes and train human resources.

Regional findings

In Latin America, Chile and Colombia are the most advanced in terms of digitalization, while business leaders in Mexico have undertaken the task of rethinking business models for success in the digital era. The cases addressed in the study suggest that many companies view change as a risky proposition, even though they recognize the opportunities digitalization brings. In this landscape, human capital is the essential element required to ensure the success of digitalization of processes in companies.

The study demonstrates that leading regional companies are the trail blazers to industrial sectors where structural changes can be expected. In this way, the disruption leader pulls its competitors along, and they, in turn, either join the movement or perish. Competitive dynamics drive transformation, a process by which real value is achieved not merely through investment in technology.

The ongoing assimilation of digital technologies is key for Latin America on several levels. For overall productivity of the factors to increase, the digitalization process must be performed throughout the productive matrix, occurring first in the industries with high transaction costs and then spreading throughout the larger system of production.

In industrial sectors, digitalization of productive processes also includes assimilation of new digital technologies in value chains, allowing incorporation of collaborative methods in product design and supply of materials to animate flexibility in production and optimal adaptation to transformations in the channels of distribution.

The study also reveals three ways by which a company achieves digitalization:

1) From its origins, i.e., the company is born digital: its business model is conceived from within digital environment.
2) Digital transformation is addressed from within the original business, which involves transforming the processes of the entire value chain sequentially, usually starting at either end of the value chain.
3) An independent digital unit detached from the original business of the company is launched.

Companies “born” digitally are accustomed to thinking about their business in terms of business platforms designed to exploit competitive features of the internet. In contrast, companies having originated in the “physical and analogue” world that strive to incorporate digital technologies are forced to rethink the fundamentals of value creation.

Acerca del gA Center for Digital Transformation
Founded in 2014, the gA Center for Digital Transformation analyzes and monitors the progress of digitalization across the broad array of commercial and industrial sectors in Latin America, determining their degree of readiness to face digital transformation by examining the development of digital strategies, realignment of value chains, development of software applications, organizational redesign and change management.

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About gA
We are a global Digital Business Transformation (dBT) company. We create value by transforming business models, processes, persons and organizations. With 25 years of experience, we are the strategic partner of companies wishing to achieve their business growth goals in the digital era. Our team of 1400 consultants work in 41 markets through 11 offices. We are gA. Learn more at: www.grupoassa.com

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