At 23 years of age, having recently earned a computer engineering degree at the University of Campinas (UNICAMP), César Gon launched a startup focused on software development with two university colleagues, Bruno Guiçardi and Fernando Matt, who are still managing the business. That is how CI&T came to be in 1995. “It was a different time, with the birth of the commercial internet as a sales tool in Brazil and around the world,” remembers Gon, who is now 47 years old.
The company prospered, went international, and became a multinational with offices in the United States, Canada, United Kingdom, China, and Japan. The company has more than 2,800 employees and expects to reach R$1 billion in revenues in 2020. It was also named Google’s key world partner from 2014 to 2016.
Today, CI&T’s principal offer is no longer customized software for corporate clients. “For the past two years, we have been developing a methodology, called Lean Digital Transformation, to help brands born in the twentieth century to adapt to the business environment of our century.” In this interview given at Prisma, the name of the building that houses the company’s headquarters in Campinas, São Paulo, Gon explains the company’s new business project and shares the secrets of the journey of the Brazilian startup that became a global enterprise.
What is Lean Digital Transformation which you have taken to market?
The goal of this project is to change the processes and corporate culture of the big brands born in the twentieth century in order for them to have the flexibility necessary for the digital era of the twenty-first century. We want to help companies on the journey of transformation, adding value that can impact sales. Regardless of success in the past, not a single company will be able to avoid redesigning itself according to the views of the customer. It is not a coincidence that the presidents of the largest companies in the world understand digital transformation as a challenge of culture, not just a technological one.
What is this methodology based on?
It is supported by three elements: change in the way a company designs and builds digital solutions, based on the philosophy of Lean [refer to explanation later]; transformation of its management system with the adoption of short learning cycles; and redesign of the leadership model, without fear of making mistakes. These three components result in the digital transformation of a company, which will become faster, more innovative, and focused on the customer. Clearly, this slides into the area of technology. It’s not possible to compete in the modern world without software and information being the heart of your business. But you must go beyond technology and promote a change of culture and the way of thinking.
Why is it important for brands to make this transition?
Competition among companies in the twenty-first century is obsessively focused on the speed with which, based on data analysis, we understand, meet, and surprise the customer. But the large corporations are slow by nature and not prepared for this reality. They look around themselves and see an Amazon, Google, or Apple that were born in the digital age and are must faster than them.
Present in Brazil, the United States, Canada, the United Kingdom, China, and Japan, the company expects to reach R$1 billion in revenue in 2020
It would not only be a question of adapting to new technologies, but also establishing a new relationship with customers?
Absolutely. The way in which we relate with brands is radically different from 10 years ago. Our desires are more volatile, and we are less tied to tradition. We want to know if that brand will solve our problems, if it understands us, and will treat us in a unique way. A possible solution is to truly connect with this volatility and uncertainty.
What inspired you to develop this project?
The Lean method originates from the English word “lean,” and arose in the production lines of the Japanese car manufacturer, Toyota, in the 1980s. It seeks to implement a more simplified process flow, striving to reduce loss of resources—materials, time, work force, etc.—and to increase value for the customer. We were inspired by this method’s capacity to increase the digital competencies of our clients.
How does this transition work in reality?
The program has a long-term application, but with short-term goals. We want a company to learn to think in shorter business cycles, of three months each. What is possible in this timeframe? Changing the learning dynamic of companies.
Could you provide examples of clients that have gone through this process?
Our client base in Brazil is comprised of 30 large corporations that include Coca-Cola, Itaú, Raízen and Cielo. At Coca-Cola, we are helping to implement a set of principles so they can change the way they are organized, connect with the public, and solve problems for their customers. This means shortening release cycles, moving from two or three years to three or four months.
Has the company already launched products in this innovation cycle?
Yes. The first was a line of juices for families, which arrived on the market together with digital tools that collect data about the receptivity of the product. The second was a natural soft drink, which is a new category worldwide. Essentially, it’s not about creating products for the masses, like Coke Zero Sugar, but rather understanding the habits of each consumer. If Coca-Cola is able to make itself a machine that understands, tests, and launches, with a culture guided by data, it will become more intelligent and closer to the consumer.
CI&T also underwent a process of transformation since it was established, correct?
The company was born in 1995 with a focus on software engineering when the commercial internet began to be used as a business tool. We saw the internet as a doorway and we were specialized in specific technology. Our focus was the national market. This first chapter of our history lasted close to 10 years. Then began the process of internationalization.
How was the transition from startup focused on Brazil to a global company?
In the 2000s, those who wanted to be part of the IT industry at the global level needed to have a classification seal for software manufacturers, called Capability Model Maturity Integration (CMMI). We were the first Brazilian company to obtain it, which happened in 2004. From there, we closed contracts in the United States.
How did that happen?
We got there offering customized software, but the business environment, primarily in Silicon Valley, was giving hints that this model was outdated. The industry of the future would be about innovation. It was necessary to master a set of technologies and discover how to create interruptions for companies and consumers. Business no longer involved sitting and waiting for demand. It required sparking the interest of the customer with technological opportunities and proposing solutions and innovations. At that time, around 2006, social media began to appear, as did smartphones, cloud computing, and the big data arsenal.
These forces have changed what you can do with technology from the perspective of the consumer.
Most certainly. We now have billions of people with a device that fits in their bag and connected via social media, generating billions of data. There has also been a drop in computer costs and the advent of artificial intelligence techniques. This changed the game. It no longer worked to design software like before. The possibilities were different.
How did you adapt to this moment?
We took the bureaucracy out of software production and created another value proposition for the market. We went beyond the business model by specification and technical design to work plugged into the problems of the customer. The engineering team worked more closely with the sales team. We proactively presented clients with technological possibilities that would create digital assets and experiences. This was the second chapter of CI&T, which lasted until 2017, when we created the Lean Digital Transformation project.
How does Prisma, the corporate headquarters in Campinas, fit into this new phase?
Prisma is a space for the cocreation of digital transformation, which was inaugurated in 2016. Part of the cultural change we are proposing involves creating environments for collaboration, where people share ideas and generate what we call collective intelligence. We need to physically dismantle somber corporate environments and create new spaces with fewer symbols of power and hierarchy—something that is already taking place in Silicon Valley. In the following months, we will create a second CI&T Prisma in California.
Will it house CI&T business units in the United States?
Yes. We are already serving Motorola, Johnson & Johnson, and Google, among other clients. For Google, we create software for finance and marketing, but we are partners, primarily in machine learning and cloud computing.
CI&T is present in what markets?
United States, Canada, China, Japan, and Europe, mainly England. Half of revenue, which was more than R$600 million in 2018, is generated in Brazil and the remainder from foreign markets, primarily the United States, representing close to 85% of total international revenue. Here, the entire portfolio is digital transformation, but abroad this offering represents 65% of the total—the remainder includes contracts focused on innovation. In two years, this value proposition should represent 100% of our portfolio.
How is company growth?
In the last 15 years, we have doubled in size every three years, on average, and we want to reach R$1 billion in 2020, while maintaining more than 50% of the business outside Brazil. The external market is a competitive scale since the United States is home to our industry’s first tier. We have to win the game there.
How is the R&D department structured?
In the digital world, the traditional view of R&D is completely anachronistic, where you have a laboratory with PhDs, who are disconnected from the reality of the customer, creating things of value. Try to find the R&D area for Google or Amazon. It’s impossible. Each engineer at Google is a cell of innovation. That’s how I like to think at CI&T. The word R&D never applied to the software industry. And as the entire industry is becoming a software industry, it applies less and less.
So, what is the role of CI&T development centers?
These centers, located in Campinas, Belo Horizonte, Tokyo, in Japan, and Nimbo, in China, focus massive processes of human capital for the production of customers’ digital platforms, such as apps, e-commerce portals, and databases for big data and analytics. Belo Horizonte is our export hub focused on remote technologies and services destined for the United States. Campinas concentrates on financial areas, specifically retail and e-commerce. The China and Japan centers develop technologies for smartphones and e-commerce. We have six business units. In all, there are more than 2,800 employees, with 120 in the United States, 100 in China, 40 in Japan, and close to 10 in Europe.
How much do you invest in innovation and what is the size of the team dedicated to it?
I don’t have an answer for that. Recently, Google, Facebook, and the companies of Silicon Valley announced that they would no longer require an engineering diploma. Here at CI&T, for some time, our process for attracting talent has been hands-on, an expression that means “come work with us, develop solutions, and we’ll see if it makes sense to work together.”
So a diploma doesn’t make a difference?
Hiring for us has very little to do with a diploma; however, a large portion of our employees have come from UNICAMP and USP [University of São Paulo]. But this is not the starting point. In our selection processes, we prioritize skills, learning speed, and capacity to collaborate in our candidates, in a multicultural work environment, with respect for diversity. For us, this is what matters.