The Power of Data Podcast
Episode 62: Introducing International Opportunities Through Data
Guest: Cristiano Heckert, Management Secretary at the Ministry of Economy for Brazil and Marcos Maciel, CEO at CIAL Dun & Bradstreet Brazil
Interviewer: Sam Tidswell-Norrish, International CMO, Dun & Bradstreet
Hi, welcome back to The Power of Data Podcast. Today I am delighted to be joined by two guests from nowhere other than Brazil. Today we have Cristiano Heckert, who is the Management Secretary at the Ministry of Economy for Brazil, and Marcos Maciel who is the Chief Executive Officer of our Worldwide Network partner CIAL Dun and Bradstreet, Brazil. Guys welcome. Cristiano, Marcos, it's good to have you on.
Thank you Sam, it's a great pleasure to be with you today.
Thank you Sam. It’s nice to share some thoughts here with you guys.
I'm looking forward to the great deal and we've got a lot to get through. We've had some pre briefings and there's a ton of content for us to tap into, so let's kick off. Cristiano, you've had a very broad set of experiences across different government departments in Brazil throughout your career. And Marcos, you've also had a broad depth of experience holding many senior leadership positions in the technology landscape for over two decades. It'd be great to hear from both of you. Just before we get stuck into the detail a little bit about your careers today. Cristiano, we'll start with you.
Thank you, Sam. First of all, I'd like to thank you again and thank D&B for the invitation for being here today. As for my career, I have certainly put in practice my years of study. I graduated in Industrial Engineering at the University of San Paolo and studied my way to a doctor's degree in that area. the meantime, I worked for eight years in the private sector. And then for 15 years, I've been a civil servant at the Brazilian federal government. I'm currently the Management Secretary in the Ministry of Economy and there I lead a team of around 300 people as part of structure that coordinates the performance of 192 agencies of the Federal Brazilian government in the fields of strategic management, public procurement, and fund transfer to local governments.
Thanks, Cristiano and over to you, Marcos.
So I've been working for many years in technology and innovation, always in the private sector. I several years ago did the launch of BCP, which is today is the second largest mobile operator in Brazil. I also worked in strategy consulting in London for four years, and I returned from the UK to establish a technology startup in solar energy here in Brazil. I'm currently the CEO of CIAL Dun& Bradstreet Brazil, where I have the pleasure to help small, medium and large companies to better know their commercial partners and manage their financial compliance risk. I did a master's degree in the UK, some courses in Harvard Business School, and Strathclyde University. And I'm currently also invited Professor of Innovation Management for FDC, which is one of the leading management schools in Latin America.
Awesome, thank you guys, and what a privilege it is and a small silver lining of the pandemic to be able to have a call a podcast recording between the UK and Brazil, this is going to be quite an experience. And before we dive straight into the special partnership between CIAL and the Brazilian government, I think it's important to set the scene about the transformations and the way in Brazil. right now. You mentioned earlier, Cristiano, that you have a team of 300 people coordinating many different areas of government and the Brazilian government is going through a broad all-encompassing digital transformation. There's over I think it's 190 different federal agencies that have over 3,000 processes, which is an enormous task when you think about transformation on that scale. We'd love it Cristiano if you could share a little bit of your insights on what the driving forces are here, and why you're seeking to digitally transform so many different governmental functions?
Yes, it's definitely an enormous task, as you said, and it has to happen in a pace that would be almost unthinkable in the past. First, to better amend the numbers, we have 192 agencies, and we currently have transformed more than 4,000 public services, as I will explain later. But focusing on the driving force that you ask and initially looking from the government's perspective, I would highlight the creation of the Information Technology Secretariat back in 2016, which I had the honor to be the first secretary and was later converted in what is today the Digital Government Secretariat. It has always focused on the digital transformation agenda as a central IT body of the Brazilian government, coordinating the entire digital transformation process. And it's important to underline the sponsorship of the presidents of the Republic. And looking now from the Brazilian citizens perspective, we can say that we are people that are very receptive to technology, and we have seen a continuous growth in the internet access in our country. The latest figures show that 79% of the Brazilian households have internet access and given that we are technology supporters, as long as the government provides digital services, the population adheres very quickly to it.
That's a huge accolade to the Brazilian government's name. 79% of households with internet access is fantastic. And as someone who spent a lot of time in the financial technology industry, I know that you have a pretty incredible FinTech agenda that's very much supported by the Brazilian government. In fact, I was reading an article earlier about one of your challenger banks, New Bank, who are doing incredible things and gaining something outrageous like 40,000 new customers a day. So it's clear to me that the digital agenda is really working, how far into that digital transformation journey are you Cristiano?
Well at the moment Sam we have identified into 4,144 services that are provided by the mentioned 192 federal government agencies. And out of those services, we have already converted 2,693, either fully or partially to the digital format. Only in 2020 we converted more than 1,000 services that were not digital and were transformed to digital channels. From those services, we identified a bunch of 126 that we considered the top demanding services that have over 100,000 interactions per year, those are the most significant ones, so we focus on that. And out of those 126, 119 are already digital and six are in the process of being transformed. So in other words, the services that are most consumed by our people are already digitalized.
Fantastic. And what have been some of the biggest benefits you've seen from these initiatives?
Well, we have double benefits. If we look at the size of the Brazilian government, it brings huge efficiency for us. So it diminished our costs of delivering the services to the seats in which results in saving government expense. But most important thing is reducing transaction costs for our people and for our business. When we provide the services in digital channels, we allow people to access them 24/7 from wherever they are and this results in more productivity for our companies and results in more convenience for the citizens that can better enjoy their time, either at work or with their family.
It's amazing. And I can imagine there's a ton of both cost and time efficiencies that are being driven. But let's talk for a moment around what some of those challenges that you're facing through the digital transformation process have been as you've tried to optimize government efficiency. Can you talk us through some of those a little bit?
Yes, for sure. First, we have a difficult fiscal situation on the economic side. And it definitely worsened last year with the pandemic. So this for one side makes an ideal opportunity to accelerate the process of digitalization. But sometimes we don't have the amount necessary to do the investments in technology, even if we know that it will be paid off very soon. So equalizing this fund disponibility is always a challenge for us. On the other hand, the challenge that we face is the fragmentation of the government. Given that each agency has its own building infrastructure, its staff, its budget, its work process. So this challenge of bringing everyone to a unified vision of the citizen, converging all of them unifying the channels to a single portal, this becomes overwhelming coordination challenge for us and the government.
It's a really nice opportunity now, as we talk about government fragmentation, to talk a little bit about the special partnership I mentioned earlier between CIAL and the Ministry of Economy. And the reason I say that, you know, as we work with governments and businesses around the world to provide single commercial views of entities. Data is the most important feature, and largely the Dun & Bradstreet D-U-N-S® Number is the connector between all of them helping provide that efficiency across different departments. Could you tell us a little bit about the collaboration between CIAL and the Ministry of Economy and its significance?
For us, it is an important initiative towards the internationalization of the Brazilian economy, which is a guideline of the current government addressing public procurement. We are trying to reduce entry barriers for foreign suppliers. So as we can have more competition in our tenders, and thereby obtain more favorable products and services for the government. We conduct in the federal government around 100,000 procurement process per year and we in the Ministry of Economy provide the digital platform where those processes are conducted. So it's important for us to have centralized contracts and centralized databases of suppliers that can be offered to all the agencies in their procurement process. And this also reduces the transaction costs for the supplier so as they can register in this platform that we manage, and from there have access to all the bidding process for the whole government.
Does that mean, historically, government RFP processes or procurement opportunities, were only available to domestic companies, but now you're creating much greater competition, you're able to create better efficiencies for the government? And often, I'm sure procure greater quality products and services by opening that to a global audience?
Yes, if you look on the legislation side since the 90s, the legislation said that you cannot put barriers to foreign suppliers. But when you go to the practical world, the real world, the international company to really take part in procurement in Brazil had to fulfill a lot of paperwork, register here, have representatives in Brazil. So it puts a lot of entry barriers, that means costs for those who wanted to take part in the process, even before they knew if they would or not succeed in the competition. So what we are trying to do now is using technology, removing those practical barriers so that the international company can send their documentation from wherever it is in the world and can access the platform, it is validated by this partnership with database, and so they are enabled to participate in the bidding process. And only if they become the winner. So then they will think about establishing a group of people here in Brazil who will be responsible for delivering the product or the service.
I love that, what a fantastic initiative. Congratulations on the internationalization of your public procurement program. Marcos, let's move over to you and tell us a little bit about why this collaboration with the Ministry of Economy is so exciting to you. How are we supporting this great work that the Brazilian government are doing?
Yes, it's a really a great honor to be part and to be contributing to this work together with the government. As you say D&B is a partner of several governments worldwide, like the US, UK, Israel, Netherlands and many others. And through these partnerships, we help these governments make better decisions. So I'm quite happy to be able to contribute to the advanced the way that Brazil use the power of data, the way we can provide better service to the population. And even personally, as a citizen, I feel great to be able to support the efficiency of the government and also to offer solutions for Brazilian companies to increase export, create more jobs and improve the economy.
Marcos, you get bonus points for managing to weave the name of the podcast into your answer. I love that, the power of data strikes again. Can you tell us a little bit from your business experience about the evolution that you've witnessed over the last decade perhaps in the technology space? What are some of the most significant changes you've seen regarding how organizations are adopting advanced data driven solutions to address some of their biggest challenges and how much has that sped up over the last 12 months in the pandemic environment?
I would say that in Brazil companies are starting to embrace data driven solutions in their business. We already have a number of companies that use data in order to make better decisions. But overall, I think we are in the first phase of adoption because most companies they use basic data to make decisions. For example, credit analysis or sales and marketing initiatives, but often this data is collected and analyzed manually. And in many cases, this data is then manually inputted on Excel to make credit recommendations for instance, or to really provide the insights that the data brings. And what we are seeing and we are bringing to the market are different approach which is more based on solutions on platforms that truly automate and optimize the process within the companies. So here we can interconnect the data with the CRM, with ERP systems, we can load the customer's own data, we can use the high quality data that we have from D&B, and then these solutions they really enable a step change in the efficiency of the finance areas for example, the market areas. In the case of finance areas for example, in addition to increase efficiency, these kind of solutions, they can also enable better location of credit because sometimes company are too conservative in giving credit line to a customer because they don't have a clear picture of the customer. And with more data, they will be able to perhaps extend the credit line. And also, of course, on the other hand, having more information sometimes maybe will broaden, to give less credit to some clients or suppliers to reduce your risk. Companies are increasing the adoption of this kind of solutions. And we see more and more interest in companies to really improve their process not only use the data, but improve their process with the right approach in terms of solution a platform.
And I think that the difference you highlighted there between manual data management and an automated approach is something that now through organizations like CIAL and Dun and Bradstreet is super affordable for any size company. And I was reading an article the other day that compared the efficiency and cost effectiveness of having an automated data driven strategy to being the difference between being a car from the 1950s and being a Tesla today. You can be a smart company and a data driven company, no matter if you're a two-person company or a bakery, or if you're a large technology companies. Isn't that right, Marcos?
Absolutely. I think some of these more complex systems existed in the market for many years, but they are more driven for large organizations, or they were in the past more driven to large organizations like telecom companies, banks, and multinational companies. In the case of CIAL, what we are bringing to the market is a really affordable SaaS - Software as a Service - solution that any company can enable and be able to start using from day one. No complexity, really simple to use, really simple to set up to enable more and more companies to enjoy the power of this information to improve the efficiency of their process and then become a more stable company.
One of the recent observations in the power of data has become exponential, there's so much more opportunity, and particularly over the last 12 months where the digital inflection point has been reached when this sort of digital singularity where the world will never be this slow again. We've seen loads of new trends emerging. Can you maybe both talk us through some of the key trends you've seen in terms of digital adoption to ensure business continuity over the course of 2020? And perhaps let's go to Cristiano first.
Well, I think the big deal of 2020 was realizing that many of the activities that we do in the public administration could be done remotely. That was a huge surprise to everyone. And any resistance that existed to the home office model was run over by COVID-19. And so we boosted the demand management program, which is home office arrangement that allows Civil Services to do fully or partially - depends on the activity he is enrolled to - from home. And this is bringing already a significant reduction in the beauty occupancy expenses here in the federal government. So we expect to reduce our expenditure with rent and everything that is associated to it, such as power, water cleaning, and so on. And only in 2021, we are forecasting something like $400 million that we can save on those expenses.
It's such a good point in Cristiano, you know I think about the UK, we had a number of manual processes for managing export documentation, for example, and the pandemic has been a forcing function to digitize those processes. You think about the UK’s insurance industry, it's a center of excellence known the world over yet everyone was doing business in Lloyds of London. And if you'd said to someone in the industry, you're not going to spend the next 12 months in Lloyds of London, they would have thought the world ended. And now everything is being done more efficiently, both with time and cost. It's been a fascinating forcing function that's really sparked a lot of innovation. Marcos, what are you seeing in the industry?
I think all the points that I could mention as well I mean, it has been a boom in e commerce like in many countries. In Brazil I think this situation last year really made all the people realize that ecommerce is a good solution that they can buy goods from their own house, get it delivered. Companies themselves became really good on the logistics side which used to be one of the barriers and I myself have been buying things that I buy on a Saturday morning and I receive on a Sunday. It's really amazing the work that these companies are doing. Another point is that telemedicine again, myself I've used it a couple of times with my kids and it really works you know, seeing a doctor, making a doctor appointment. Of course it depends on the topic, not for more serious stuff, but depending on the topic, you can make a doctor appointment over Zoom and you'll get all sorted in a couple of minutes. You don't need to drive a long way to go to a hospital wait there with the risk of getting all the diseases and so on. Another point as well, as Cristiano mentioned, it really proved that remote work can work, you know, it really can be made. We will be able throughout the year to close large deals by videoconference, this will make the economy much more dynamic, we don't need to waste hours on the traffic to visit clients to close deals. So these will be overall a big boom for the economy. Another point that they see in terms of trends as well, it kind of adds to the comment I made before. It's related to data driven approach to exports. I think that companies started more and more to use data to help them export more. In the past, a lot of the work was done in a formal way, especially for small and medium sized companies in Brazil. Over 90% of the exports in Brazil were made by large organizations, small and medium companies, they export about $7 billion per year, which is a really small figure for a country the size with over 20 million companies, it's really nothing. There is a lot of opportunity for us to increase these. What I see that was missing before and now I see a change, especially because of what happened last year is that to use data to establish credibility abroad, and to find the best customers and suppliers. So for example, in terms of credibility in local negotiations, Brazilian companies are used to assess partners using D&B data or any of the credit bureaus. But when they go abroad, and they try to establish a partnership, they don't have a credit profile or information on that country. And then this creates situations where they don't get credit, or they lose the deal all together. I can mention an example of a company that we worked recently, they invested a lot in promotional abroad, they went to a major fair send the top salespeople to close contracts in the US, but they were not successful. And what they did wrong is the fact that they were not known in the market. So potential partners, so clients in the US could not really verify that this company was trustworthy. And this is what is changing more and more. And I think last year's events help drive even faster for companies to understand that they need to be known, they need to use data, both in terms of being known and showing credibility abroad. Like for example solutions that we offer, like DUNS registered or having a complete profile on our business information report. Like with using these tools, they will be able to get credibility abroad. And also the same thing happens to finding the right clients. So using data using the right platforms to find companies that they can work with abroad. I think Google and other similar platforms have limited capability to help companies really find good partners abroad and using more professional solutions like Hoover's and others can go a long way to increase the effectiveness of finding the right partners abroad.
Marcos, I'm so pleased that you mentioned that point because at the very heart of what we do, and particularly at Dun and Bradstreet, 180 year history is governance and trust. You know, it's a component of ESG and we've been out there for nearly two centuries, ensuring that people can trust their counterparts. And in a world where there's travel restrictions, preventing on site supplier visits and verification, diligence is much harder. And that's led to much more data lead decisioning and a huge dependency on that data. So fantastic point. We're coming to the end of the podcast and before we finish, I want to touch on an area I've been reading about with real intrigue. Brazil's President Bolsonaro has become known through COVID-19 for his incredibly generous and necessary handouts to society and his championed unfinished infrastructural projects and many other areas. Are there any stories that have been unearthed as a result of COVID-19 that have continued to meet both of you really proud to be Brazilian? Cristiano?
Yes Sam. As you mentioned, the government handouts that were made last year reached 67 million people in Brazil, it was probably the biggest handout program in the world. And we must recall that many of those Brazilian citizens did not even have a bank account before the pandemic. So we had to rely strongly in the service of digitalization, enabling payments to all those people was only possible because we develop the applications and we integrated different databases have different publications. So it was definitely a huge challenge for the banks and the government to work together to make the resources come to the people, but it's a successful case that we are all very proud of. Another one that would mention was the launch of the digital work permit. It's a document that's mandatory in Brazil for every person who wants to get a job or to provide any type of service in the industry, commerce, agriculture, etc. So the work permit is now an application that every citizen can install in their mobile. So we are seeing really a turning point where digital services are becoming a reality and providing the population data to services that they could not receive until then.
That’s fascinating, and while I actually I knew about the 67 million Brazilians, which is an amazing number, I mean, what an incredible thing to be proud of - I did not know about the digital work permit. And I imagine that's going to be supporting an improvement in the unemployment number as well as make things much more accessible and efficient, Marcos, anything that you'd like to end on that makes you proud to be a Brazilian during these times?
I think one of the things that make me proud is actually the work that Cristiano is doing. So increasing the drive in government, as he mentioned, is a huge undertaking, and it's not easy in Brazil is not easy with so many government agencies and so on. But I think the government is doing a fantastic job on that direction, it really adds to improve the way that the citizens relate to the government. And this overall push in terms of government efficiency, I think is really needed is something really important for Brazil, is something that was perhaps not sought after so strongly in the past and it's really welcome. The point I mentioned of companies being driven for export is something else. So that was a result of COVID renewed strength and a renewed focus on export. It's very important for Brazil, Brazil is a very insular country. And we have a lot to gain if we become more export oriented so this is also something interesting. And I do hope that the current situation they what happened last year, we really focus our attention government that they ensure in society attention implementing the necessary reforms that we need in Brazil, in particular, the tax reform, administrative reform and the privatizations because these will modernize even more the Brazilian government and bring huge benefits to the society in general.
Thank you, Marcos. Look, guys, we're the end of this podcast. But I just want to take a moment to reflect and well firstly, say thank you for joining us, but also congratulate you on the incredible work you're both doing. The power of data is an extraordinary thing but the power of partnerships is what creates real results. And I know that the partnership between the Ministry for the Economy and CIAL is how it's gonna go from strength to strength.
As you mentioned, really, the power of data is something fantastic. And I can say that we are experiencing it here at the Brazilian government.
There is a lot of other conversations happening in Brazil, with other agencies in the country. And I hope this is one of many stories to come that we can share here with you.
Thank you for being wonderful guests. Thank you for your insights, and I look forward to speaking with you again soon.
Thank you very much, Sam.